Bitcoin Bounce or Retest Key Support at $73,835, Setting the Stage for Further Upside

BlockBeats News, February 28th, according to CoinDesk, analyst Omkar Godbole stated that "financial markets, which are often driven by human emotion, frequently exhibit a tendency to retrace after an asset's price breaks above a long-term resistance level. This retracement is to confirm the validity of the breakout and such a test of the 'resistance-turned-support' level may set the stage for a larger subsequent rally. The 'breakout and pullback' phenomenon is commonly seen across various asset classes, and Bitcoin's current sell-off may be just such a healthy retest of this pattern: the price is probing the key resistance-turned-support level at $73,835, which was breached back in November 2024. Back then, Bitcoin's breakout above this level marked the end of a multi-month consolidation phase coinciding with Trump's win in the U.S. presidential election."

"The market tends to retest after a breakout to confirm the support's validity, driven by investors' risk-averse behavior. According to prospect theory, traders tend to quickly secure profits when in profit rather than letting the gains run, leading to a sudden stall in the post-breakout rally and triggering a pullback. For example, Bitcoin holders have been taking profits around the $100,000 mark since December 2024."

"Bitcoin has now dropped over 15% from its February high, falling below $80,000 and approaching the $73,835 support area. If this level manages to halt the decline, sidelined investors who missed the initial bull run may step in, triggering a rebound and attracting more buying interest, thereby setting the stage for a larger rally. However, it is important to note that if the retest fails or the rebound is weak, it may signal a risk of trend reversal. The Bitcoin weekly chart shows a typical breakout retest structure, and if $73,835 holds, it may pave the way towards the $150,000 target. This analysis is in line with the technical formations of 2020 and 2023, but traders should be wary of risks stemming from macroeconomic policy changes and market sentiment fluctuations."