Path 1. tests back to the Low of 02/06/18 and then makes new highs (without making a lower low)
Path 2. reaches the resistance channel and then tests back to the Low of 02/06/18 and then makes new highs (without making a lower low)
Path 3. reaches the resistance channel and then makes a new low into the most extreme Buy point, which is the intersection of the lower downtrend (red) channel line and the long term (blue) rising trendline from late 2011. The rising trendline must be viewed on a logrithmic chart if you want to see it its entirety. Here's a link to a chart that shows it
If you are on BTC , then the obvious preference is choice #1. If you look at the chart linked just above, you can see visually why there is a good possibility that this low holds. Also, consider than the week ending 2/11 (tomorrow, as of this post) will show the highest weekly on since early 2011.
But we must be ready for anything, and the current trend is down, so new lows must be considered. If we significantly break the current low, IMHO the market will get sucked down to the extreme point, which is simply the support trendline of the long uptrending channel. That's going to flush out a ton of sellers, leaving no place to go but up. If paths 2 or 3 are taken, there will be an opportunity for a sell against the resistance channel. With Path 2, the sell would have a lower probability of success than with Path 3, simply because Path 2 has already made a testback to the low, and we know there are plenty of reasons that the current low is a strong support point. If Path 3 is taken, you will be able to sell your long position for > $10k and buy back (for the next Bull Run) more than twice and maybe as much as 3 times the #coins you sold. That is huge! These two sell opportunities should be considered whether you are shorting or just exiting your long position.
Of course there are other paths, but the above are the most likely and in any case, their consideration should be a useful part of your analysis. I'll have more updates on this 'idea' as the market decides how it wants to proceed.
Regarding your 2nd question, I do not think of a downtrending market in a clearly defined channel as a testback, but rather just the end of a current trend. So testbacks, to me, are relatively quick w/o changing the trend at the degree of the original low (for a buy testback).