3 Bitcoin Indicators Signaling BTC’s Price Rally to $128K Next

Bitcoin (BTC) is breaking higher toward $128,000 after hinting at an inverse head-and-shoulders breakout, just a day after the Federal Reserve delivered its first rate cut of 2025.

The move comes as BTC/USD cleared resistance around $116,800, the neckline of the bullish reversal pattern.

An inverse head-and-shoulders, formed by a deeper low between two shallower troughs, often signals the end of a downtrend and the beginning of a stronger rally.

Based on its technical structure, the breakout points to a measured upside target near $128,000.

This breakout coincides with a critical macro shift.

On Sept. 17, the Fed cut rates by 25 basis points, lowering the federal funds range to 4.00%–4.25%. It was the central bank’s first reduction since December, marking a clear pivot toward easing after months of restrictive policy.

Historically, Bitcoin has benefited from looser financial conditions, as lower yields and cheaper borrowing costs fuel demand for risk assets.

Bitcoin Prints Key Golden Cross

Momentum indicators further reinforce the bullish setup.

Bitcoin has just witnessed a golden cross between its 20-day (green) and 50-day (red) exponential moving averages, a signal that previously preceded a 30%-plus rally earlier this year.

At the same time, BTC trades well above both EMAs, while the daily relative strength index (RSI)—still trading below its overbought threshold of 70—shows more room for price to grow.

A $240M Short Squeeze May Accelerate Rally

Onchain data suggests the next leg higher could be powered by a short squeeze.

According to Glassnode, one of the largest short liquidation clusters sits near $121,500, tied to positions worth more than 2,054 BTC (~$240 million notional).

With BTC trading near $117,000, the market is just 3–4% away from testing this level. If prices climb to $121,500, it could trigger automatic closures of these oversized shorts.

That would force sellers to buy back spot BTC, injecting hundreds of millions of dollars in net demand into the market.

Other large liquidation levels remain stacked higher, including $154,000 (2,696 BTC; ~$316 million notional) and $151,500 (820 BTC; ~$96 million). Together, these short positions represent nearly $700 million in potential liquidations sitting above the current spot.

This setup adds a mechanical catalyst to Bitcoin’s bullish case. A push into $121,500 could unleash a cascade of liquidations that accelerates the rally toward the $128,000 technical target, and potentially beyond if higher liquidation walls are triggered.