As Bitcoin (BTC) rebounds from its recent decline below the $75,000 support, some market observers are outlining key levels that will determine the direction of the flagship crypto’s next big move.
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Bitcoin between two crucial levels
Over the weekend, Bitcoin fell about 4.5% due to geopolitical tensions, hitting a one-month low of $74,289 before recovering. On Monday, the leading cryptocurrency rose another 1.6%, jumping back above $77,000.
In the middle of this performance, Ali Martinez outlined two crucial price levels that will determine whether BTC “enters its next major expansion phase, or whether it extends its current value reset to provide a prime buying opportunity.”
The analyst explained that Bitcoin has been in a consolidation phase since the February crash and is moving within a channel during this structural reset, allowing the market to build liquidity “before the next definitive move.”
Notably, BTC is near the upper limit of its channel after a recent rejection of the crucial resistance at $82,500. Martinez noted that buyer conviction has increased aggressively as price tests this level, with derivatives traders strongly positioning for a breakout and funding rates recently reaching 0.4%, the highest in more than two months.
He previously explained that when funding rates rise this high, it is a signal that the derivatives market is “completely dominated by aggressive buyers” and that “traders are willing to pay a hefty premium just to hold their long positions,” as the prevailing market bias continues to lean significantly toward an upcoming expansion.
Meanwhile, on-chain data shows that some of the largest whales have used this tight range to “rebalance their portfolios,” redistributing more than 18,447 Bitcoin, worth about $1.42 billion.
“This supply consolidation has placed BTC between resistance at $78,258 and support at $75,733,” he stated. Therefore, regaining this resistance could trigger a rally towards $84,569, while the loss of the key support could send Bitcoin towards $66,898.
More pain to come?
Other market observers also pointed to the $75,000 and $78,000 levels as crucial levels in the short and medium term. Daan Crypto trades emphasized that the Bitcoin bull market support band is currently between these levels.
Since BTC has failed to hold the upper limit of this band as support for two consecutive weeks, Daan affirmed that bulls should “continue to hold this band (…) to keep this short/medium time momentum in their favor.”
He previously warned that a drop below the $75,000-$76,000 mark and a weekly close below would indicate the April-May recovery rally was “just a big deviation/dead cat bounce.”
Meanwhile, Merlijn The Trader noted that Bitcoin has been rejected from the 200-day moving average (MA). According to the post, this is the same level as the 2022 bull trap, which led to a 40% correction from that area.
Like the other analysts, he confirmed that the loss of the $75,000-76,000 zone would accelerate the move to new lows, with an initial target of $67,000, where a CME gap is located. He also pointed out that BTC highs typically end the same way: three bumps at the 21-week SMA, followed by the market lows
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The trader noticed this afterwards reaches After its 2021 cycle peak of $69,000, Bitcoin retested the 21-week SMA three times during the correction before reaching its bear market bottom.
This time, BTC has retested this key indicator twice, suggesting that another drop to the ‘real bottom’ of almost $50,000 could follow in the coming months if history repeats itself.
Featured image from Unsplash.com, chart from TradingView.com