Bitcoin, a Dead Cat Bounce if $75,000 Collapses... "Bulls Are Bitterly Trapped"

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Bitcoin (BTC) rebounded after falling below the $75,000 support level, but the key price range that will determine its next direction has narrowed. Market analysts have presented the $75,733 support level and the $78,258 resistance level as pivotal points that will determine Bitcoin's next major move.

NewsBTC reported on May 26 (local time) that as Bitcoin shows signs of recovery after recently falling below the $75,000 support level, some market observers have identified key ranges that will dictate its next major move. Bitcoin fell by approximately 4.5% over the weekend amidst geopolitical tensions, hitting a one-month low of $74,289, before rebounding. On Monday, it rose an additional 1.6%, climbing above $77,000.

Analyst Ali Martinez presented two price levels that will determine whether Bitcoin “enters its next major expansion phase or continues its current value reset, providing significant buying opportunities.” Martinez explained that Bitcoin has been moving within a channel, accumulating liquidity, during a structural reset process since the sharp decline in February.

According to Martinez, Bitcoin recently rejected a key resistance level at $82,500 and is now hovering near the top of the channel. He analyzed that buying conviction aggressively increased while the price tested this range, and derivatives traders significantly increased their positions targeting a breakout. Funding rates recently climbed to 0.4%, reaching their highest level in over two months. Martinez explained that when funding rates rise to this level, it signals that the derivatives market is completely dominated by aggressive buyers, and traders are paying a high premium to maintain long positions.

On-chain data also showed signs of some large whales rebalancing their portfolios within a narrow price range. They redistributed over 18,447 BTC, worth approximately $1.42 billion. Martinez stated, “This supply redistribution has placed Bitcoin between the $78,258 resistance level and the $75,733 support level.” He assessed that a recovery of the resistance level could trigger a rally to $84,569, but losing the key support level could push it down to $66,898.

Other market observers also viewed the $75,000 to $78,000 range as a key price area for the short to medium term. Daan Crypto Trades explained that Bitcoin's bullish support band is currently formed in this range. He stated that since Bitcoin failed to maintain the upper end of this band as support for two consecutive weeks, bulls must continue to defend this range to preserve short-to-medium-term momentum. Previously, he warned that falling below the $75,000 to $76,000 range and a weekly close below it would suggest that the recovery rally from April to May was “a significant deviation and a dead cat bounce.”

Merlijn The Trader pointed out that Bitcoin was rejected at the 200-day moving average. He explained that this range was the same level that prevented a bull trap in 2022, which was followed by a 40% correction. Merlijn The Trader also stated that losing the $75,000 to $76,000 range could accelerate a decline with an initial target of $67,000, where a CME gap exists. He noted that after Bitcoin hit its cycle high of $69,000 in 2021, it retested the 21-week simple moving average three times before reaching the bear market low. If the same pattern repeats this time, he believes it could head towards a true bottom around $50,000 in the coming months.

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