The tipping point for check conversion: Why a rebound to 66,000 has become the golden opportunity for a bearish setup

The recent market trend has played out a classic check conversion scenario for us. Bitcoin quickly surged from $64,000 to $66,000, seeming like a bullish rebound that excites the bulls. In reality, this is the script that short-sellers love to see. This kind of check conversion—where an apparent upward signal turns into a hidden downward trap—is where professional traders distinguish themselves. While retail investors cheer “bottom confirmed,” those who understand the market are already contemplating their next move.

Honest Signals from Technical Patterns: Why Weak Rebounds Confirm Downtrend

In a true downtrend structure, rebounds are never the start of a reversal but a test of selling pressure. The move from $64,000 to $66,000 perfectly illustrates this—buying interest exists, but its strength is disappointing. After a 2,000-point rally, momentum immediately stalls. This behavior is a classic intermediate decline pattern, not a bottom reversal.

Every weak rebound tells the same story: bulls are met with cold resistance when testing higher levels, selling pressure remains strong, and the last batch of holders sees an opportunity to exit. Real bottom rebounds should show strong buying desire, not feeble attempts after a forced rally. From a technical perspective, the $66,000 level exposes the fragility of the bulls’ strength.

From Top-Fishing to Shorting: The Logic of Layered Short Positions

The most painful way to short is to impulsively chase during a sharp decline, only to be stopped out by a rebound. Precise shorting, however, relies on patience to wait for the optimal entry point. The $66,000 level offers ideal conditions for bears to position, for three reasons:

First, the rebound after a short-term plunge injects enough liquidity into the market, allowing your short positions to be filled at desirable prices without excessive slippage. Second, the limited height of the rebound reveals that bulls are essentially on the defensive rather than attacking, a crucial difference. Third, there’s still ample downside room toward the real strong resistance zone (around $68,000–$70,000), providing traders with enough margin for error.

Layered shorting is effective because you don’t need to chase at the bottom. Instead, you can calmly build positions at levels where bulls can only push so far. This combines excellent risk management with psychological advantage—you’re not fighting the market but letting its weakness come to you naturally.

Time Is on the Bears’ Side: Long-Term Support from the Macro Environment

From a macro perspective, multiple signals point in the same direction. Notable industry insiders’ liquidation actions indicate caution about the future market. Retail investors are still dollar-cost averaging, but there are no clear signs of market clearing. Liquidity conditions remain unchanged. Technically, this decline is expected to continue at least into the second half of the year, possibly longer.

This isn’t just short-term volatility; it’s a mid-term trend shift. $66,000 is merely a midpoint in this long process. Claims of “double bottom confirmed” or “bottom fishing” are essentially psychological traps set for retail traders. Those who truly understand the market will quickly adjust their stance when the check conversion occurs.

Prioritizing Risk Management: Small-Scale Testing Strategies

Even the best logic must be implemented within a risk management framework. It’s recommended to adopt small-position short entries, avoiding full-size trades. The first short can be initiated slightly above $66,000, with position size adjusted based on subsequent price action. Stop-loss levels should be based on technical support points, not fear.

The key is to hold this mid-term position at least until the second half of the year. Patience before the check conversion and the establishment of a bearish advantage is crucial for success. Market textbook patterns tend to reward traders who combine sound logic with discipline.