Bitcoin has pulled back to retest a support line sitting around $74,500, a level that has been central to technical analysis for months. The line served as resistance multiple times in March, formed the April low last year, and was broken to the upside in April. Bitcoin has now come back to test it from above.
Whether this level holds or breaks will determine the direction of the market for the sessions ahead.
The pullback from the May highs has unfolded as a three-wave decline rather than five waves. In technical analysis that distinction matters significantly.
Bitcoin has also produced what analysts are identifying as a first upside impulse from the $74,500 support cluster, a tentative early signal that buyers are defending the level.
The support zone to hold on any further pullback sits between $74,860 and $76,200, defined by standard Fibonacci retracement levels. The first resistance that would confirm a reversal is $78,236. Breaking above that level would suggest the short-term bearish scenario is losing momentum.
Bullish case: Bitcoin holds above $74,860, breaks above $78,236, and reclaims the 200-day moving average currently sitting around $79,100. From there the May highs around $82,000 become the next target. An extension toward $95,000 to $100,000 remains possible if the stock market continues higher and Bitcoin produces the right wave structure.
Bearish case: Bitcoin fails to hold $74,860 and produces one more leg lower, completing five waves down from the May highs. That would confirm a top is in and open the door to a more significant decline toward $56,000 initially, with $44,000 as a deeper target in the larger correction.
Analysts have consistently flagged the correlation between Bitcoin and equities as a key factor in the near-term outlook. As long as the S&P 500 and NASDAQ continue grinding higher from their March lows without a confirmed top, Bitcoin is unlikely to break down decisively. The C-wave decline analysts are watching for in Bitcoin will likely coincide with a meaningful correction in equity markets.
Until that correlation breaks, the stock market remains one of the most important charts to watch alongside Bitcoin itself.
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