Bitcoin sentiment hits seven-month high as rally to $115,000 looms

Investor sentiment towards Bitcoin reaches a seven-month peak, with technical indicators suggesting potential upward momentum towards $115,000.

Key factors

• Bullish pennant formation signals potential continuation of the current bullish trend.

• Economically softer US data and expectations for dovish Federal Reserve policy could act as catalysts.

• Recent US-China trade deal announcement has contributed to a risk-on market sentiment.

Bitcoin (BTC) price broke above $110,000 briefly on Wednesday following better-than-expected US Consumer Price Index (CPI) data released Monday, which came in at 2.4% YoY against a forecast of 2.5%. Core CPI also beat estimates at 2.8% (forecast 2.9%). The US Dollar Index (DXY) dropped to a multi-month low of 98.5.

However, the likelihood of a Federal Reserve interest rate cut next week remains slim, as headline CPI has responded by rising again for the first time since January.

The overall market sentiment around Bitcoin is bullish. The recent cooling of CPI could provide further catalyst for BTC to test new heights above $115,000 this week. A potential price move higher might occur on Thursday following the release of US Producer Price Index (PPI) data. Economists anticipate a 0.2% MoM increase in headline PPI and a 0.3% core rate, although the market may already be anticipating a muted print.

According to Cointelegraph analysis, Bitcoin is approaching a new all-time high. This potential reversal is being fueled by renewed optimism surrounding the US-China trade deal announced by former President Donald Trump.

The agreement is expected to diminish macroeconomic headwinds that previously dragged BTC prices down to a year-to-date low of $74,500 in April following Trump’s imposition of tariffs. Although described as “done” pending final approval, this deal has ignited a risk-on market mood.

Related: ‘Unique’ Bitcoin holder trend backs BTC’s next price discovery phase: Glassnode

Bitcoin sentiment at seven-month high

Data analytics platform Santiment indicates that Bitcoin’s bullish sentiment reached a seven-month high. The combination of positive social media comments (tracked on X and Reddit) and President Trump’s election victory in November 2024 has apparently led to this positive market sentiment.

Bullish sentiment is also evidenced by BTC’s low funding rate, which is at an all-time high price range.

“I honestly don’t remember a time where I’ve seen prices going up this much and funding rates being completely flat. This usually means that the underlying rallies are mostly spot driven. Not sure how we’re going to see big sell-offs without high leverage in the market. Most likely this means higher.” – Jacob Canfield, Crypto Trader

From a technical perspective, Bitcoin is forming a bullish pennant pattern on the 1-hour chart, which typically signals bullish continuation. An accompanying relative strength index (RSI) is resetting near the 50 neutral point.

Price action is currently consolidating near $110,000. According to analysis, a liquidity sweep around $108,000 might occur first, absorbing sell-side liquidity before clearing late long positions.

Technical projections suggest the current bullish pennant pattern has a measured move target of approximately $115,000. The objective aligns with the upper trendline extension.

Falling back below $106,748 presents more significant support. A break below this could put the price at risk of dropping lower to around $104,900. However, a swift recovery from such a break could dynamically extend potential upside.

Related: New Bitcoin treasuries may crack under price pressure