Bitcoin struggles at the contracting triangle resistance line... will it fall into the swamp of doom at $74,200?

▲ Bitcoin (BTC)

Bitcoin (BTC) has secured strong downside rigidity above the $76,500 mark, consolidating a short-term bottom and initiating a full-fledged recovery rally.

Crypto media outlet NewsBTC reported on May 22 (local time) that Bitcoin formed a solid support base in the $76,500 range, then settled above the $76,800 mark, initiating a full-scale short-term rebound. With strong buying pressure, the price quickly broke through the $77,000 and $77,200 levels in succession.

The buying forces, which increased upward pressure, succeeded in pushing the price above the 23.6% Fibonacci retracement level of the entire decline from the recent short-term high of $82,016 to the low of $76,020. Currently, Bitcoin is trading above the $77,200 level and the 100-hour Simple Moving Average (SMA), maintaining its upward momentum. If the price continues a stable trend above the $77,200 level, there is a very high possibility of another strong upward attempt.

However, around $78,000, selling pressure also presents significant resistance. Currently, a contracting triangle pattern has formed on Bitcoin's 1-hour chart, establishing a resistance zone at the $77,900 level, leading to a fierce struggle. The immediate primary key resistance level is identified around $78,500. If Bitcoin decisively closes above the $78,500 resistance line, the price will open significantly upwards. In this scenario, it could quickly surge to test the $79,000 resistance level, which is the 50% Fibonacci retracement zone between the high and low. With additional buying pressure, it could further extend its territory to $81,200 and then to the final hurdle of $82,000.

On the other hand, if Bitcoin ultimately fails to break through the $78,000 resistance zone and succumbs, there is a coexisting risk of another sharp selling wave, resuming the downtrend. The immediate support line that must not be broken is around $77,200.

If this last line of defense is breached, the first major support level at $76,800 will be tested, and the next defense line will be pushed down to the $76,200 range. If further sell-offs occur and capital outflow intensifies, it could plummet to the $75,000 support level in the short term. Market experts warned that Bitcoin's final key support level is located at $74,200, and if even this position is given up, it could fall into a deep swamp of decline, completely losing its short-term recovery ability for the time being.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*