Bitcoin Tests Key EMA, Analysts Eye $120K Rally

• Bitcoin’s recent 7.8% price decline signaling a “perfect bottom” for a new rally.
• Technical indicators and whale activity suggesting a breakout target near $120,000.

Bitcoin has retested a key support level at its 50-day exponential moving average (EMA) following a 7.8% price drop. On August 2, 2025, Cointelegraph reported that analysts view this technical retest as a pivotal signal, possibly marking a “perfect bottom.” Historically, such retests have preceded rallies of roughly 60%, adding weight to expectations of a potential price recovery.

An inverted head-and-shoulders (IH&S) pattern on Bitcoin’s price chart supports the bullish outlook. This well-known pattern, often linked to trend reversals and breakout scenarios, has successfully retested its neckline. The confirmed IH&S pattern sets a bullish target price of approximately $120,000, strengthening the case for an imminent rally.

On-chain activity further supports this narrative. Cointelegraph highlighted a recent sale of 80,000 BTC by a long-term holder, commonly referred to as a “whale.” This transaction marks the second major profit-taking wave of this bull market. Historically, such significant sell-offs tend to precede consolidation phases and subsequent upward moves. Galaxy Digital / Cumberland likely executed this large-scale transaction, and the market’s ability to absorb it with limited price disruption indicates growing resilience.

This latest wave of profit-taking aligns with earlier notable events. The first occurred following the introduction of U.S. spot Bitcoin Exchange-Traded Funds (ETFs). Analysts view the market’s adaptability during these major sell-offs as a sign of strength and maturity, further bolstering the outlook for higher price targets.

However, some indicators present a contrasting narrative. ETFs recently experienced investor outflows, breaking a 19-day streak of inflows. Additionally, short-term technical indicators hint at a possible sell-off. This counterbalances the longer-term bullish signals from the 50-day EMA and the IH&S pattern.

Despite ongoing price fluctuations, analysts continue to emphasize technical and on-chain data. This data points to the possibility of a significant rally in the near future.