4 Key Factors Boosting Bitcoins Bullish Outlook to $120K: Spot Price, Central Bank Policy, Energy Market Trend, and Technical Setup

Bitcoin's (BTC) price has been on a tear this year, with multiple analysts pointing to a potential price target of $120,000. Recent developments have only strengthened this bullish case, driven by four key factors: the spot price, central bank policy, energy market trend, and technical setup.

BTC's Love Affair with $100K

Bitcoin's resilience has been marked by prices holding largely above $100,000 through the Iran-Israel conflict and the U.S. airstrike on Iran. This steadfastness indicates underlying strength, which could reassure holders while attracting new buyers, potentially fueling the next leg higher in prices.

According to Nicolai Soendergaard, research analyst at Nansen, "We are seeing exchange outflows, so it is likely that people, regardless of being retail or institutions, are buying the dip." Data tracked by Glassnode shows weak hands began selling on June 10, while conviction buyers resorted to bargain hunting. "Since June 10, BTC investors classified as Loss Sellers rose 29% (from $74K to $95.6K), showing growing pressure on weak hands. But Conviction Buyers also increased, suggesting sentiment isn’t collapsing," Glassnode said.

Trump Seems to Have Found His Doves

Liquidity easing, represented by Fed rate cuts and other measures, typically bodes well for stocks and cryptocurrencies. Some Fed officials are warming up to the idea of a potential rate cut in July, which contradicts Chairman Jerome Powell's data-dependent stance.

"Trump seems to have found his doves," wrote Adam Button, ForexLive's Chief Currency Analyst and Managing Editor, after Federal Reserve Governor Michelle Bowman, a hawk, said the central bank should cut rates in July. Bowman said that the impact of tariffs on inflation may take longer and could be smaller than initially expected, adding that she would support lowering the interest rate next month, assuming inflation pressures remain contained.

Fed Governor Christopher Waller voiced a similar opinion Friday, favoring a rate cut in July. "Now, maybe it's just a coincidence that two former hawks who are also Republicans are suddenly doves, but it's starting to look like a MAGA takeover of the Fed," Button wrote. Powell's semiannual monetary policy testimony to the U.S. Congress is due on Tuesday. Powell is likely to reiterate the Fed's independence and data-dependent stance while potentially being grilled by Republicans for keeping rates elevated.

Oil Slide

Never before has the crowd been so wrong on crude oil. On Sunday, the consensus was that the U.S. military strikes on Iran and Tehran's potential closure of the Strait of Hormuz would send oil prices skywards. But on Monday, oil prices on both sides of the Atlantic crashed. The slide is good news for central banks fearing the second-order effects of the oil price spike seen late last week, and those expecting rate cuts.

The second-order effects typically include increased transportation expenses, higher prices for goods reliant on oil-derived products, and potential wages, all leading to an overall increase in inflation. "So much for the fear of second order effects of Oil that Central Bankers proclaim," said James E. Thorne, chief market strategist at Wellington Atlas. "Crude oil down 6.5% on the day and 15.41% YoY..that’s deflation."

Bullish Technical Setup

Momentum indicators – key moving averages – are once again aligned bullishly. The 100-day simple moving average (SMA) has just crossed above the 200-day SMA, weeks after the 50- and 200-day SMAs produced a bullish golden crossover. The result is that the three widely-tracked averages are stacked one above the other in a classic upward-sloping bullish momentum formation. A similar configuration emerged in November last year and remained intact throughout the entire rally from $70