Bitcoin at $123,000 – where to next?

Bitcoin emerges as a safe haven amid market volatility

Bitcoin has once again exceeded expectations, reaching a record-breaking high of over $123,000. The current rally further solidifies its place as a significant player in the global financial system.

The latest surge occurs against a backdrop of falling United States (US) equities amid a threat of President Trump imposing a 30% tariff on European Union (EU) and Mexican imports, underscoring Bitcoin's growing appeal as an alternative asset.

While stock markets continue to fluctuate in response to headlines about US tariffs, Bitcoin remains unshaken. It is steadily transforming into the kind of politically neutral store of value that many of its early proponents had envisioned. Unlike traditional financial instruments, Bitcoin is not susceptible to supply chain disruptions or corporate balance sheet vulnerabilities.

The cryptocurrency's value is driven primarily by capital flows and investor sentiment rather than underlying business fundamentals. This current rally has been fuelled by a combination of institutional investment and an increasingly favourable regulatory environment. These factors have been further intensified by President Trump's recent wave of tariff-related announcements.

However, whether Bitcoin can maintain its momentum if a broader equity market selloff materialises remains uncertain. For now, it continues to perform strongly, clearly outpacing gold as a perceived safe-haven asset.

Institutional investment drives unprecedented demand

A significant driver of this rally has been the surge in institutional participation. Over the past couple of weeks alone, US-listed spot Bitcoin exchange-traded funds (ETFs) attracted more than $2 billion in net inflows. This influx of capital indicates rising investor confidence and marks a structural evolution in how Bitcoin is perceived.

Beyond ETFs, corporations are also increasing their Bitcoin exposure. This represents a clear sign of long-term conviction and growing adoption of Bitcoin in corporate treasuries.

Major pension funds and insurance companies are now allocating portions of their portfolios to Bitcoin. This institutional embrace represents a fundamental shift from Bitcoin's early days when it was primarily held by retail investors and tech enthusiasts.

The growing institutional interest has provided a stabilising effect on Bitcoin's price action. Large-scale investors typically employ more sophisticated risk management strategies, which can help reduce the extreme volatility that characterised Bitcoin's earlier years.

Macroeconomic factors fuel Bitcoin's ascent

Bitcoin also benefits from favourable macroeconomic tailwinds. Falling US Treasury yields and growing expectations of interest rate cuts by the Federal Reserve (Fed) have bolstered risk appetite. This shift has channelled capital into assets that are viewed as hedges against inflation and the devaluation of fiat currencies.

Bitcoin's correlation with traditional risk assets appears to be weakening, which has allowed it to outperform equities in recent sessions. This shift has led many institutional investors to view Bitcoin not merely as a speculative play but as a credible portfolio diversifier.

The weakening US dollar has further enhanced Bitcoin's appeal as an alternative store of value. As central banks worldwide continue expansionary monetary policies, Bitcoin's fixed supply cap of 21 million coins becomes increasingly attractive to investors seeking scarcity.

Inflation concerns persist globally, with many economies experiencing persistent price pressures. Bitcoin's deflationary characteristics make it an appealing hedge against currency debasement, particularly as governments continue to increase public debt levels.

Technical analysis suggests continued strength

From a technical perspective, Bitcoin's breakthrough above $120,000 represents another milestone. The cryptocurrency has successfully cleared multiple resistance levels that had previously constrained its upward movement.

Bitcoin has reached another record peak, surpassing the 161.8% Fibonacci extension level of the 2019 to 2021 uptrend, which is projected upward from the 2022 low, at a value of $122,056.92. The current highest price stands at $123,181.77, as the cryptocurrency continues its ascent toward the next major 161.8% Fibonacci extension target at $143,519 and the psychological $150,000 region.

​Bitcoin monthly candlestick chart 

​If Bitcoin were to experience a decline, the initial area of minor support lies just below the $122,056.92 161.8% Fibonacci extension level, around the May high of $111,965.80.  

​In a bearish scenario, should the price drop below Saturday’s low of $116,902.23, attention may return to the May peak of $111,965.80, followed by the early June high of $110,617.03 and the early July high of $110,598.55. An additional support level to monitor is the July 7 high at $109,745.66. 

​Bitcoin daily candlestick chart

​From a short-term perspective, the outlook remains bullish as long as there is no confirmed bearish reversal that pulls the price below the key support area between $107,509.83 and $107,335.44.  

​In the medium term, the trend remains bullish, with an ongoing target set at the 161.8% Fibonacci extension level of $143,519. 

Regulatory clarity boosts mainstream adoption

On the regulatory front, several developments have added further legitimacy to Bitcoin's standing. In March 2025, President Trump signed an executive order to create a Strategic Bitcoin Reserve, officially recognising it as a national reserve asset alongside gold.

This move represents a landmark moment for digital assets in terms of governmental acknowledgment. The decision signals that Bitcoin has achieved sufficient maturity and stability to warrant inclusion in national financial strategies.

In addition, the Federal Housing Finance Agency now includes cryptocurrencies among qualifying assets for mortgage underwriting through agencies like Fannie Mae and Freddie Mac. This development eliminates a significant barrier to broader adoption and integration into traditional financial systems.

The regulatory landscape continues to evolve favourably, with policymakers increasingly recognising the legitimacy of digital assets. This trend provides confidence to institutional investors who previously remained on the sidelines due to regulatory uncertainty.

Market dynamics reveal both opportunity and risk

Despite the optimism, volatility remains a prominent feature of Bitcoin, which is on track for its fourth straight month of gains, having risen by over 65% from its $74,441.20 April 2025 low. This rally has to be put into the context of the over 30% decline seen between the January high and the April 2025 low.

While some analysts predict that Bitcoin could reach $200,000 within the next year, others caution about potential corrections. The rapid price appreciation has created conditions where significant liquidations can occur, leading to sharp price movements in either direction.

Investors must remain vigilant about cross-market correlations and their potential impact on positions.

The options market reflects heightened expectations for continued volatility, with implied volatility measures remaining elevated. This environment presents opportunities for skilled investors but requires careful position sizing and risk management.

Since cryptocurrencies are unregulated, investors need to be aware that they have no consumer protection to fall back on and may lose all their capital.