Bitcoin has gained momentum in recent days, rising above $66,000 and returning to its highest level in more than a month. The advance follows a multi-month correction from Bitcoin's March 2024 record above $73,000, which had been fueled in part by the launch of U.S. spot Bitcoin ETFs earlier in the year. According to Bitfinex analysts, the next major test for BTC is whether it can break through a nearby resistance area around $68,000.

In a weekly report, Bitfinex analysts said the $68,000 region is the key level that could determine whether Bitcoin's recent recovery continues. They noted that the area roughly aligns with the average purchase price of Bitcoin acquired by investors over the past five months.

Because of that, analysts said investors currently holding losses could view a return to the $68,000 break-even area as an opportunity to sell, potentially creating selling pressure near that level.

Bitfinex also said the $68,000 zone overlaps with Bitcoin's previous peak in mid-June, when the asset's recovery stalled before it dropped below $58,000. Analysts said the market is likely to respond strongly as this resistance area is retested for the first time in an extended period.

According to the report, a sustainable move above the resistance zone would require continued buying in the spot market rather than activity driven mainly by speculation. Without that support, BTC could again face rejection at the level and retest lower support areas formed during the recent recovery.

"...the next test is approaching with the short-term investor cost floor and other key resistance levels converging around $68,000. A sustained move above this range, supported by strong spot demand, would strengthen the recovery scenario, while rejection could expose the market to another test of its recent lows."

Bitfinex recently said it is seeing signs of gradual improvement in market conditions. The firm pointed to U.S. spot Bitcoin ETFs shifting from sustained outflows to modest inflows as one example. These ETFs, which began trading in January 2024 after regulatory approval, have become a closely watched gauge of institutional and retail demand.

However, Bitfinex said overall demand, including purchases by institutional Bitcoin treasury companies such as MicroStrategy (referred to as Strategy), remains well below the levels seen earlier this year. The firm said this indicates the recovery has not fully taken hold.