Resting is easiest to judge by party function. If several characters can no longer perform their main roles effectively, continuing may create more risk than value.
Check whether key roles still function
If healing, control or core damage tools are mostly unavailable, the party may be operating below its useful baseline.
Use renewable options for simple encounters
Basic attacks and reusable abilities can preserve stronger resources for harder situations.
Do not hoard powerful abilities forever
If a strong ability meaningfully changes a dangerous fight, using it can be more efficient than saving it indefinitely.
Rest based on actual depletion
Let the state of the party, not a rigid schedule, determine when a reset is useful.