Bitcoin is showing renewed strength after climbing to a five week high, with analysts suggesting the asset has moved beyond its capitulation phase and entered a key transition period that could determine its next major move.
Analytics platform Swissblock reported on Monday that Bitcoin has exited its capitulation regime and is now trading within what it describes as a transition zone. According to the firm, this stage often marks the point where either a fresh bullish impulse develops or momentum weakens once again.
The analysts noted that Bitcoin’s next major hurdle is reclaiming the “ignition line,” which would pave the way toward the next critical inflection point. While every sustained rally has historically followed this sequence, Swissblock cautioned that not every transition phase results in a successful breakout.
Bitcoin entered the capitulation zone in early June after falling below the $70,000 mark. The cryptocurrency later dropped to a cycle low of around $58,000 near the end of June before beginning a steady recovery. Over the past three weeks, Bitcoin has gained roughly 12%, pushing it into a stronger momentum zone.
CryptoQuant analyst Darkfost highlighted another encouraging signal, noting that Bitcoin has spent 95% of its history trading at higher MVRV levels than it is currently. The MVRV ratio compares Bitcoin’s market capitalization with its realized capitalization, which values coins based on the price they last changed hands. According to the analyst, the data suggests Bitcoin remains significantly undervalued relative to its historical performance.
Crypto trader Daan also pointed out that the $65,000 level has acted as a ceiling throughout July. However, the continued formation of higher lows over the past three weeks increases the likelihood that Bitcoin will eventually break through that resistance.
At the time of writing, Bitcoin was trading around $65,500 after gaining about 1% over the previous 24 hours. The cryptocurrency briefly reached $65,700 on Monday, its highest price since mid June when it briefly traded above $67,000.
Despite the recent gains, Bitcoin continues to trade within a range that has held for roughly seven weeks, with the current price sitting near the upper boundary of that channel.
Looking ahead, Alphractal founder and CEO João Wedson identified $66,000 as the next major resistance level. A successful breakout above that price could send Bitcoin toward $66,700, which he described as the Structural Midline within the firm’s Structural Market Bands. Historically, this level has acted as a significant area of price reaction, and Wedson expects sellers to defend it aggressively if Bitcoin reaches that zone.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
