Bitcoin is showing the first signs of recovery after firmly holding the main support area of the joint. A strong reaction from this level suggests that buyers are stepping in to contain the selling pressure. As the market begins to stabilize, attention is now turning to whether this defense could mark the start of a broader bullish reversal.
How Bitcoin Protects the Major Confluence Zone
Bitcoin has successfully secured a large rally and is starting to show the first signs of recovery. In accordance with Cryptorphic, after converging around the 200-week EMA and the Weekly Correct Value Gap between $70,000 and $76,000, the market behavior seems to be changing from absorption to the initial stages of a possible trend reversal.
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From a key level perspective, the support area returned is now between $70,500 and $73,900, where buyers have stepped in to stabilize the market. On the other hand, resistance is between $80,600 and $85,000, which represents the next major hurdle for the bulls. However, the bullish outlook would not work if Bitcoin recorded a weekly close back below the $68,000 level.
Recent technological advances also support the improved structure. Last week’s candle made a strong one bullish setup right at the 200-week EMA, indicating that the previous wave of strong selling pressure was absorbed by strong demand. Price regained the $73,900 level, effectively turning the old demand zone back into an active support zone.
Long lower wicks seen in last week’s candles also reinforce this view. Rather than random noise, they point to consistent buying gains and institutional accumulation during pullbacks. As the pressure to sell seems to fade, the way is small resistance it now appears to be leaning towards the upper limit of the previous range.
BTC Breaks Out of Local Pressure
Charting the way forward, Cryptorphic pointed out that Bitcoin appears to be breaking out of its immediate local pressure phase. If the price can maintain strength above the $74,000 level, it will support the view that a higher term base has already been formed. Under that scenario, the next main target for the bulls will be to go to $80,600, the level that was active separation the point.
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If Bitcoin managed to cross the $85,000 mark, the outlook could change significantly to the upside. A break above that resistance is expected to initiate a new bullish move, possibly reaching the $100,000 psychological milestone.
From a broader perspective, bias is always aggravating. The recent correction has continued, and a strong reaction to the 200-week EMA suggests that the market structure successfully defended. Therefore, the environment continues to favor a long-term “buy the dip” strategy, and the market may reward those who accumulated during the retest of the $70,000 region.
Featured image from Pixabay, chart from Tradingview.com
