The recent market pullback had many traders/investors concerned about the potential for a deeper sell-off and retracement of the preceding rally from 50,000 to over 70,000. However, the market found significant support at a key confluence zone with 6 distinct levels of technical support stacked between roughly 62,000-64,000 as shown in the chart below.

Bears made several attempts to break through this formidable support area, but each downside breach was quickly met with aggressive buying interest. Bulls appeared resolute in defending these levels and unwilling to surrender the prior hard-fought gains.

Risk management was tightened as traders dug in to defend, with protective put options sold against long portfolios. This created a situational spectrum for a strong reversal once the selling pressure subsided.

Indeed, the supply of Bears was eventually exhausted after testing the lower support levels. This allowed a short-squeeze rally to materialize, with traders caught leaning the wrong way scrambling to cover exposures into strengthening bids. Momentum gathered as the psychological 65,000 level was reclaimed, which had been acting as a pivotal trading battleground.

Since recapturing 65,000, the market has had an elevated base to operate from as a higher low. This has emboldened traders to take another shot at attacking the previous highs above 70,000, though the path could remain volatile heading into this next upside attempt.

While the Bears were firmly rebuffed at long-term support, it's premature to declare they have been totally vanquished. Traders/investors would be wise to keep risk management protocols engaged, using 65,000 as a key lower level to continue defending. Caution will be required to fully capitalize on any potential upside follow-through from this hard-fought support regain.