Bitcoin smashes $120K barrier: bullish momentum and US ‘crypto week’ fuel record rally

Bitcoin has blasted past the $120,000 mark, hitting new all-time highs between $122,300 and $122,600 in recent trading sessions. The rally is being powered by a potent mix of institutional inflows and renewed optimism around U.S. crypto regulation. Investors are closely watching the progress of major legislation like the GENIUS Stablecoin Act and CLARITY Act, both gaining traction in Congress. Adding to the optimism, President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve, reinforcing bullish sentiment.

However, technical indicators suggest Bitcoin might enter a phase of consolidation before its next big move. Data from Deribit shows options market makers holding long gamma positions around the $120K–$130K range, leading to price pinning through neutral hedging strategies—buying on dips and selling into rallies. This behavior typically results in range-bound trading.

Meanwhile, the Deribit Volatility Index (DVOL) has declined despite rising prices, signaling potential bullish exhaustion. While DVOL has recently stabilized around 36%, technical tools like the MACD hint at possible volatility ahead, which could prompt a short-term price pullback.

Another headwind is the strengthening U.S. dollar. The Dollar Index (DXY) recently broke out of its downward trend, making Bitcoin more expensive in dollar terms and possibly capping further upside in the near term.

Despite these pressures, some on-chain metrics continue to paint a bullish backdrop. Notably, Bitcoin's on-balance volume (OBV) has been steadily rising—often a precursor to a breakout. This same divergence was seen ahead of Bitcoin's 57% rally earlier this year.

Analysts expect the $120K–$130K zone to act as a consolidation range, supported by options market dynamics and subdued volatility. A decisive breakout above $130K, however, could reignite upward momentum, especially if regulatory clarity continues to improve and institutional demand holds. Support zones to watch in case of a downside move lie between $118,800 and $112,000.

While Bitcoin may trade sideways in the short term, the broader outlook remains bullish. With legislative progress, institutional participation, and a strengthening technical base, a push toward $140,000 remains on the cards once consolidation ends.