Bitcoin climbed back above $81,000 on Tuesday after suffering a sharp rejection around the $80,000 level a day earlier, putting the key psychological threshold back in focus as bulls attempt to extend the recovery.
The $80,000 mark has emerged as a major test for Bitcoin.
On Monday, BTC made two attempts to break through the level, with rallies toward $80,000 shortly before 11:30 and again after 12:15 met by heavy selling.
The rejection sent Bitcoin down roughly $1,500, with the price falling below the $79,500 support level before finding a local bottom above $78,400.
Bitcoin subsequently recovered, and the cryptocurrency pushed above $80,000 again on Tuesday.
Market analyst James Stanley has noted Bitcoin had moved sharply toward the level before snapping back. The latest move above $81,000 could therefore be important for determining whether bulls can finally establish a sustained breakout.
Notably, Bitcoin is now only about $2,000 away from making its first higher high, which could be a substantial technical win for the bulls.
The rally has already put pressure on bearish traders. Lookonchain reported that two Bitcoin short positions were fully liquidated after BTC broke above $81,000, with the positions representing a combined 101 BTC, or about $8.14 million.
Some large traders, however, have been taking profits. Lookonchain said two wallets, potentially belonging to the same whale, closed Bitcoin longs after holding them for nearly two months, locking in approximately $11.6 million in profits.
The return of greed
Market sentiment has consequently moved further into bullish territory. The Bitcoin Fear and Greed Index stood at 74, indicating greed.
Still, the $80,000 level remains crucial. Bitcoin's ability to hold above it after repeatedly failing to break through could determine whether the current rally develops into a broader trend reversal.
Arman Shirinyan
Dan Burgin
