Bitcoin’s Bollinger Band “Head Fake” Sparks Rally Toward $117,000 and Beyond

Main Points:

• Wall Street open sustains Bitcoin bulls’ momentum, eyeing $117,000 and higher.
• Order-book data shows short liquidations and fresh liquidity added at elevated prices.
• Bitcoin’s price action aligns with key Bollinger Band levels, recording a second fake breakdown this month.
• Analysts warn of a “head fake” reversal pattern and highlight the next resistance near $119,000.
• On-chain metrics and broader macro forces point to continued strength despite cautionary signals.

1. Introduction: Market Context and Recent Price Action

Bitcoin (BTC) has staged a textbook rebound on August 7, 2025, holding firm at critical resistance levels and demonstrating notable resilience amid mixed macroeconomic signals and evolving on-chain metrics. After flirting with the $117,000 mark (all figures in USD) before a modest pullback, BTC/USD has kept bulls in charge into the Wall Street open, reinforcing expectations for further upside in the near term.

2. Bullish Momentum Persists as Wall Street Opens

Data from Cointelegraph Markets Pro and TradingView show BTC/USD approaching $117,000 before consolidating around $116,500. The continuation of buying pressure into the U.S. trading session indicates institutional and retail participants remain optimistic. Popular analyst Rekt Capital identified $117,200 as a pivotal level, noting that holding above this threshold could pave the way toward $119,000.

3. Short Liquidations and Liquidity Pools Signal Strength

Order-book snapshots reveal a wave of short-liquidation events as BTC climbed past $116,800, thinning sell-side liquidity and encouraging bulls to add new bids at higher levels. CrypNuevo observed on X that “market structure and market-maker footprints” drive price toward liquidity clusters, suggesting the next tangible resistance at $119,000 could soon be in play. Meanwhile, CoinGlass highlights thick resistance between $117,500 and $118,000, with bids extending below $114,000 to fill the gap in CME Group’s BTC futures, which often acts as a magnet for price action.

4. Bollinger Bands Highlight “Head Fake” Reversal Pattern

Bitcoin’s moves have closely mirrored the contours of the Bollinger Bands volatility indicator, with hourly charts rejecting the upper band and daily charts exhibiting what John Bollinger himself calls a “head fake.” After a pronounced band squeeze—typically signaling imminent volatility expansion—BTC briefly dipped below the lower band before reversing sharply, avoiding deeper declines seen at swing lows earlier in 2025.

Insert Figure 1 here: Synthetic Bitcoin Price Chart Illustrating Bollinger Band Head Fake

In his post on X, Bollinger warned analysts to beware of false breakouts, noting that ETFs—which do not trade on weekends or holidays—do not reflect this pattern, underscoring the unique 24/7 nature of crypto markets.

5. ETF Dynamics and Exclusion from Patterns

The absence of the head fake in spot Bitcoin ETFs, which observe traditional market hours, contrasts with 24/7 crypto exchanges. This can lead to skewed signals when comparing ETF performance with underlying BTC price. As ETFs don’t capture weekend volatility, they may understate short-term reversals and traps, leaving ETF holders more insulated but potentially blindsided by swift moves in spot markets.

6. Recent Trends and Broader Market Developments

6.1 On-Chain Metrics Point to Bullish Underpinnings

• Short-Term Holder Capitulation: Recent on-chain data indicate that short-term holders are capitulating, with realized losses prompting fewer sellers at current levels—a bullish structural signal for long-term accumulation.
• ETF Inflows vs. Exchange Outflows: Spot Bitcoin ETFs have recorded net inflows exceeding 10,000 BTC over the past week, while exchange reserves continue to dwindle, hinting at growing institutional demand.

6.2 Macro Forces and Monetary Policy

Mixed U.S. economic data this week have not deterred BTC bulls. With Friday’s non-farm payrolls and Fed commentary on tap, traders are positioning for potential policy shifts. Any dovish tilt could further embolden risk-assets, including Bitcoin, underpinning buys above key technical levels.

7. Implications for Traders and Investors

• Risk Management: The head fake warns of potential traps around major technical zones; prudent traders may tighten stops or scale exposure near $117,500–$118,000.
• Positioning for Breakout: A confirmed close above $119,000 could ignite a new leg higher, possibly challenging all-time highs near $140,000 later this year, per structural analysis by several market technicians.
• ETF vs. Spot Arbitrage: Divergence between ETF NAVs and spot BTC presents arbitrage opportunities, especially around CME gap fills and weekend spot moves.

8. Conclusion

Bitcoin’s recent bounce and flirtation with $117,000 emphasize the resilience of crypto markets, driven by liquidations of bearish positions and sustained institutional interest. Yet, the emergence of a Bollinger Band “head fake” cautions traders against mistaking short-term false breakouts for sustained rallies. As on-chain metrics signal a structurally bullish backdrop and macroeconomic uncertainties loom, market participants should balance aggressive positioning with disciplined risk management, keeping a close eye on key levels at $117,500, $119,000, and beyond.