- Bitcoin has regained a major resistance at $65K, generating excitement in the market.
- However, this cannot yet be a confirmation of a bull market.
Currently Bitcoin [BTC] has indeed reclaimed the $65K resistance, which is a positive sign, but it is not yet a full confirmation of a bull market.
In previous bull markets, these types of levels often represented psychological barriers. Breaking through $65,000 is significant as it marks the regaining of key historical resistance.
However, simply breaking it is not enough. Further moves are needed to confirm a bull run to $74,000.
Why is $65K a psychological barrier for Bitcoin?
Historically, whenever key resistance is tested, this indicates strong buying pressure, often reflected by the RSI reaching an overbought condition.
Psychologically, this can make traders cautious. A quick move towards $66,000 could raise concerns about overextension, raising the risk of a sharper correction later.
For example, when BTC reached its ATH of $73,000 in March, the RSI remained above 70 for over a month, signaling an impending pullback, which ultimately caused BTC to return to $61,000.
According to AMBCrypto, to maintain a consistent bull run, Bitcoin must remain above $66K and ideally rise further or pull back to $61K for a healthy retest.
Source: Coinalyse
Currently, the RSI reflects historical retracement points when BTC regained key resistance levels. Traders may become wary and start taking profits in anticipation of a possible correction.
In short, without a pullback, Bitcoin’s price could quickly become overextended. Therefore,
Retracement may be necessary after this
According to AMBCrypto, a retracement to $61K would help confirm that the previous resistance at $65K has successfully turned into support.
Simply put, this would give bulls a chance to demonstrate their strength by defending this support level.
If this trend continues, it could attract more buyers looking to enter the market at a lower price, making it easier for Bitcoin to move past $70,000.
Source: Bitcoin Magazine Pro
Typically, the Z-score entering the green box has subsequently led to a bull rally, evidenced by the spike testing the red band, highlighting an overheated market.
Therefore, a healthy retracement to $61K could pave the way for more aggressive buying, paving the way for BTC to retest its initial ATH.
The key will be to stick with it
Conversely, instead of pulling back to $61K, Bitcoin jumps straight to $66K. This rapid increase indicates strong buying pressure as investors are eager to enter the market without waiting for a better price.
While it seems unlikelythis could be a bullish signal, showing that there is enough demand to sustain higher prices. Therefore, to sustain a bull market, Bitcoin must remain above $66,000 and ideally continue to rise.
Over the past three days, as Bitcoin tested the $65,000 resistance, many long positions entered, expecting bulls to hold the level.
Source: HyblockCapital
Read Bitcoin’s [BTC] Price forecast 2024-25
However, with short sellers emerging again, a long liquidation could lead to a retracement to $61K, reinforcing AMBCrypto’s hypothesis. Overall, the bull rally above $70,000 depends on bulls holding the resistance at $66,000.
Otherwise, a retracement to $61,000 is essential to confirm support, reduce volatility, attract buyers and set the stage for a sustained bull run to $74,000.