Bitcoin pulled back to retest $76,500 as support, but the long-to-short delta indicates bulls have a significant advantage if the range highs are reclaimed.
Bitcoin bulls fell $515 short of their $80,000 target after BTC (BTC) topped out at $79,485 on Monday, but a potential upside is that the brief pullback provides a necessary retest of key underlying levels.
In technical analysis, a break of structure is generally followed by a support-resistance retest as swing traders take profits at preset levels that align with metrics such as the Fibonacci retracement, exponential moving averages, Bollinger Bands, order book structure, and more. The support-resistance flip is also a feature traders look for to confirm that a longer-term resistance (in this case) has turned into support. When confirmed, it gives some traders the confidence to open new positions at the S/R level as they believe the break of structure and retest marks either the completion or the start of a trend reversal.
After managing the first decisive breakout from the 3-month-old channel, Bitcoin retested the channel resistance (at $76,688) that had pinned down every BTC rally since Feb. 8. A deeper retest could see the price drop to the 20-day moving average at $75,250, and then confirmation of the S/R flip would entail daily candle closes above the former trendline resistance.
