Bitcoin Breaches $112K: Can the Rally Reach $120K?

Bitcoin Price Surges Past $112,000 Resistance

Bitcoin (BTC) has broken through the $112,000 resistance barrier that had capped its progress for several weeks. It's currently trading around $115,104.

On-chain data reveals a growing trend of holder retention alongside an increase in the estimated leverage ratio, both indicating strong confidence in Bitcoin's long-term potential. If buying pressure persists, BTC may soon attempt to reclaim the $120,000 level.

Holder Conviction at 2025 High

Data from Glassnode shows that Bitcoin holders are demonstrating increased conviction. The Holder Retention Rate, which tracks the percentage of addresses holding BTC over consecutive 30-day periods, has been steadily climbing since August 6. As of now, it stands at 80.49%, the highest level year-to-date.

This is particularly noteworthy as BTC traded sideways for most of August, a period that typically prompts traders to exit positions. The rising Holder Retention Rate suggests that most investors opted to maintain their positions, reinforcing their long-term outlook on the asset.

Rising Leverage Ratio Signals Bullish Sentiment

Bullish sentiment is also growing among derivatives traders, as evidenced by the surging estimated leverage ratio (ELR) across exchanges. The current ELR is 0.26, the highest since the start of the year.

The ELR measures the average leverage traders apply to BTC positions, calculated by dividing open interest by the exchange’s reserve for that asset. A rising ELR indicates that traders are increasing leverage, suggesting greater confidence and a higher risk appetite.

Potential Targets: $119,000 and $122,000

If high retention rates and bullish derivatives trading continue, the current Bitcoin rally could strengthen, potentially pushing BTC toward $119,367. A successful breach of this level could then propel the price toward $122,190.

Conversely, any decline in bullish conviction could lead to a retest of the $111,961 support level.