Bitcoin snaps back after failed downside break. Can buyers take the next step?

Bitcoin fell to a low of $79,694 today, taking the price below a key swing area between $80,106 and $81,183. That area dates back to August 20 and has been an important reference for traders.The break below that floor should have opened the door for additional selling pressure. Once broken, the swing area—and particularly its upper boundary at $81,183—should have attracted sellers on a corrective bounce.However, the sellers could not sustain the momentum.After reaching the new low, the price snapped back higher, closed back above the top of the swing area, and continued its recovery. Over the last hour, that rebound extended to $82,537.The sellers had their shot. They missed.That failure takes some of the bearish pressure off the market and puts the price back within the broader trading range extending toward $87,374. However, returning to the range is one step. Giving buyers more control requires another.The next test: the 100- and 200-hour moving averagesThe next key hurdle comes against the converging 100- and 200-hour moving averages near $82,710.With the recovery high at $82,537, the price is getting within striking distance of that moving average ceiling. What happens there will help determine whether the rebound can develop into a stronger move higher.A move above both moving averages would tilt the short-term bias more to the upside. However, the price also needs to stay above them. A brief break followed by a quick reversal would leave the buyers vulnerable to their own failed breakout.If buyers can clear and hold above that hurdle, the next upside targets come into focus:$84,178: The high for the week.$85,578: The lower boundary of the upper swing area.$87,374: The upper boundary of that swing area and the broader range ceiling.Those targets give buyers a roadmap, but the moving averages are the first test. They need to get through that door before looking too far up the road.Staying below the moving averages keeps the battle aliveIf the price cannot move above the moving averages, the rebound remains a recovery within the range.In that scenario, buyers and sellers would continue to battle between the lower support area at $80,106–$81,183 and the moving average ceiling near $82,710, with those averages continuing to move lower.The $81,183 level becomes an initial reference on a pullback. Staying above it would help show that buyers are defending the reclaimed swing area. Moving back inside that area would weaken the recovery and bring $80,106 back into focus.A sustained move below $80,106 would put sellers back in a stronger position and raise the risk of a return toward today’s low at $79,694. Below that low, the 38.2% retracement of the move higher from the July low at $76,052 becomes a potential downside target.The trading lesson: a failed break is a clue. Confirmation is the next step.When price breaks below an established floor, sellers have an opportunity to take control. Traders look for downside follow-through and for the broken support to become resistance on a rebound.Today, that did not happen. Bitcoin recovered the broken area and extended higher. Traders who sold the break and remained short were then facing a move against their positions. Buying to cover those shorts can add fuel to the rebound.However, a failed downside break does not automatically establish an uptrend. It tells us that sellers failed at one important location. Buyers still need to prove they can clear the next resistance level.That is why the moving averages near $82,710 matter. They provide a reference for judging the recovery:Above and holding: Buyers gain more control, opening the door toward $84,178.Below: The rebound faces a ceiling, keeping the range battle in play.Back below $80,106 and holding: The recovery loses credibility, and downside risk increases again.The lesson is to watch what price does after a break. The initial move gets your attention. The ability to stay beyond the level—and build momentum—is what gives the move credibility.For now, the sellers missed their opportunity below the floor. The buyers have the next opportunity against the moving averages. This article was written by Greg Michalowski at investinglive.com.