Three Key Risks That Could Stall Bitcoin’s Rally Toward $120K

Bitcoin (BTC) is continuing its upward climb, supported by the inverse head-and-shoulders breakout earlier this week, setting the stage for a potential rally to $120,000. Prices have crossed the 50-day simple moving average (SMA), a widely followed momentum indicator, while the Guppy Multiple Moving Average (GMMA) hints at a potential bullish cross—signals that may attract momentum-driven traders and accelerate gains.

Despite the bullish setup, there are three critical factors that could limit Bitcoin’s upside.

1. Approaching Bull Fatigue Zone
BTC is nearing the bull fatigue zone above $115,000. Historical patterns since July show that rallies above this level have met strong selling pressure, as reflected by long upper wicks on the last two monthly candles. Even though bulls pushed BTC above $124,000, price retraced below $115,000, signaling a key resistance area and potential hesitation among buyers.

2. Has the Dollar Already Priced in Fed Rate Cuts?
The U.S. labor market is weakening, and futures traders have priced in roughly 70 basis points of Fed cuts by year-end and 125 basis points by July 2026. Despite these expectations, the dollar index remains in the 97–98 range, down just 0.2% to 97.55 this week.

This raises a concern: if the dollar has already priced in expected rate cuts, it could rebound, capping gains for dollar-denominated assets like BTC and gold. Technical indicators, including Bollinger Bands, suggest the index is in a tight squeeze, signaling a potential sharp move in either direction—possibly unfavorable for Bitcoin.

3. Generational Bullish Momentum in 10-Year Yields
Expectations of rapid Fed cuts have driven anticipation of falling 10-year Treasury yields, which would normally encourage risk-taking in financial markets. However, long-term charts indicate a generational bullish shift in yields, suggesting limited downside. The 50-, 100-, and 200-month moving averages are aligned bullishly, a configuration last seen in the 1950s that historically preceded decades of rising yields.

Higher yields could make fixed-income assets more attractive, reducing the flood of money into riskier assets like Bitcoin. The same trend is observable in two-year yields, which are particularly sensitive to interest rate expectations.

Bottom Line
While Bitcoin shows strong momentum above the 50-day SMA and GMMA support, bulls face significant challenges: resistance near $115K, a potentially resilient dollar, and structurally higher long-term yields. Investors should weigh these factors carefully as BTC targets $120,000.