• Bitcoin now consolidates above the neckline at $119K after a breakout from an inverse H&S pattern.
• The price is inside a short squeeze zone from $117500 to $137500, with traders watching every daily close.
• A CME gap remains unfilled near $114K, which may still act as a future price magnet for a pullback.

Bitcoin has broken out from an inverse head and shoulders pattern at the $119,000 level, signaling strong bullish momentum. The breakout occurred on the daily timeframe and is now followed by steady consolidation just above the neckline. The pattern suggests increasing buyer interest and strong technical structure as price stays within the short squeeze zone.

Daily Breakout Supports Bullish Continuation Setup

The daily chart shows Bitcoin pushing above the neckline of an inverse head and shoulders pattern formed over several weeks. This neckline, previously a resistance zone, now holds as a consolidation platform for price action around $119,106. A confirmed break over this structure typically marks the beginning of a sustained bullish leg.

Technical analyst Anup Dhungana confirmed the breakout and noted that consolidation has taken shape just over the neckline area. He pointed out that the chart structure remains solid in the higher timeframe. A key price zone has developed inside the marked “trap zone” where Bitcoin now hovers.

The left shoulder, head, and right shoulder of the pattern are all clearly defined. After the right shoulder completed in early July, Bitcoin broke upward from $114,000 and rapidly moved to the $119,000 region. Current price movement is showing stability with several tight-range candles forming between July 20 and July 28.

Market Structure Aligns With Short Squeeze Setup

Price action is now entering what Dhungana calls the “short squeeze trap zone,” ranging between $117,500 and $137,500. This range presents a critical opportunity for bulls as it represents the next leg of price discovery. The squeeze may lead to liquidations of short positions as price moves up further.

The clean structure of the inverse H&S supports this potential upside. In previous cycles, similar breakouts have led to multi-week rallies. Market participants are now watching whether this same scenario will unfold during the current cycle.

During the week of July 20, Dhungana previously indicated a pullback might happen around the neckline to fill a CME gap near $114,000. That gap remains unfilled as price continues to hold above the neckline. This suggests stronger hands are maintaining control of the trend.

Technical traders will be monitoring volume closely to see if confirmation of continuation arises. If Bitcoin pushes above $125,000 with strong volume, it may lead to a swift run toward the upper band of the trap zone. Current price remains within a consolidation flag above the neckline, indicating that buyers are accumulating.

Will Bitcoin Push Toward $137K or Revisit the $114K Gap?

The pivotal question now is whether this breakout confirms the start of a major rally or if price revisits lower levels. Bitcoin has broken out above resistance, but traders still consider the unfilled CME gap a possible pullback target. That zone near $114,000 could attract price if neckline support weakens.

For now, Bitcoin is ranging in a tight zone near $119,000 while preparing for the next move. The price structure supports continuation, but confirmation is needed through volume and daily closes. The overall sentiment remains bullish unless price dips below the neckline in the coming sessions.

With $137,500 as the trap zone ceiling, bulls may target this zone if momentum builds. The current tight consolidation suggests preparation for a large move. Market participants remain alert to how the structure resolves on the daily and weekly charts.