Yes, you will need a new circuit for a new water heater even a small one. I think water heaters are sized on the number of showers. That is the biggest factor.
120V means the type of voltage. When you say a new breaker your talking about handling load/amperage/available power to run your water heater. On your water heater is a label that says how much power the unit draws. In the national electrical code handbook is a section(s) that tells you what size breaker and wire is required depending on your current draw or required power, etc. Having the right voltage is only half the equation.