FX.co ★ Bitcoin faces resistance at $118,000 once again

Bitcoin once again ran into resistance at $118,000 and failed to break through this level. This indicates that the market currently lacks enough bullish momentum to push above $118,000, suggesting that the consolidation phase may continue and potentially open the way for a deeper pullback toward $107,000 and $105,000.

Meanwhile, news emerged yesterday that Michigan lawmakers are reviewing a bill that would allow up to 10% of state funds to be invested in Bitcoin. The proposal, which has sparked heated debate among financial and political circles in the state, could set a precedent for other US regions and open a new chapter in the history of public sector investment.

Supporters of the bill argue that diversifying the portfolio by including Bitcoin could enhance long-term returns on state investments. They emphasize Bitcoin's growth potential as an asset and its ability to hedge against inflation. Proponents claim that a 10% allocation is a reasonable cap, enabling the state to benefit from digital assets while minimizing risks.

Opponents, however, raise serious concerns about Bitcoin's volatility. They stress that investing public funds in Bitcoin is a speculative move that could lead to substantial losses. There is an emphasis on the need for high standards of transparency and accountability in the management of state finances.

If enacted, Michigan would become one of the first states to officially permit investments in Bitcoin using budgetary funds. Such a decision would undoubtedly influence attitudes toward cryptocurrencies in the public sector and could become a catalyst for the wider development of the digital economy. Debate around the bill will be a focal point for traders in the days ahead.

Trading recommendations:

For Bitcoin, buyers are now aiming for a recovery to $117,800, which would open an immediate path to $119,300, followed by $120,900. The furthest target is the high near $121,300, with a breakout above signaling further bullish momentum. On a decline, buyers are expected near $116,000. A move below this region could quickly send BTC toward $114,400, with $113,200 as a deeper target.

For Ethereum, a clear hold above $4,619 would open a direct path to $4,697. The furthest target is the high around $4,784, a break of which would confirm renewed bullish momentum and buyer interest. In the event of a decline, buyers are expected near $4,533. A drop below this level could quickly send ETH toward $4,441, with $4,347 as the deeper downside target.

What we see on the chart:

- Red lines indicate support and resistance levels, from which either a pause or a sharp move in prices is currently expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

A crossover or test of the moving averages by price typically acts either as a brake on the market or sets a new impulse.