Since it topped out at around $6,500 on March 31, Bitcoin price spent most of April 1 in a steady slump that saw it plunge from $6,494 to $6,147. This pullback symbolized the poor performance that was taking place in the traditional markets where the Dow and S&P 500 lost 4.44% and 4.41%, respectively.
The drop in the traditional markets seemed to be a reaction to the negative news that the United States surpassed 200,000 Coronavirus cases. Earlier in the week, the White House also said that it agrees with the estimate that a staggering 240,000 Americans could lose their lives due to COVID-19 in the next three weeks.
If that happens to be the truth, it will likely extend the time mass quarantine, and social distancing policies stay in effect. In turn, it will damage the economy extensively. As advised by many market analysts, most of the global markets will probably not bottom out until the Coronavirus pandemic is brought under control.
Bitcoin Breaks Pattern
Interestingly, a little while after equities markets closed, Bitcoin price broke from the pattern of setting lower highs, making a steep upside move that pushed it to $6,744. This move came as the price was on the verge of dropping below the $6,200 psychological support to finish the right shoulder of a sloppy head and shoulder pattern on the 4-hour chart.
Had the drop happened, traders would be considering a target near $5,150. Thus, the current surge above $6,600 resistance level us a welcome relief for the Bitcoin bulls.
The rise through the $6,250-$6,450 range enabled Bitcoin to rise above the $6,600 resistance. Even though there was a pullback, traders are striving to turn this level into formidable support. After the price consolidates above $6,600, the traders will target $6,725 and $6,900.
Looking at the daily charts, it is clear that the volume profile visible range (VPVR) indicates that above $6,900, the $7,100 to $7,200 zone might present a stiff resistance. In the short term, holding $6,600 as support and then setting a higher high above $6,900 would be a positive step forward.
On the flip side, if the Bitcoin price loses momentum, a pullback to retest the underlying support at $6,400 (Bollinger Band moving average) and $6,300 is probable. Int he case that bitcoin encounters a more substantial correction, the Bitcoin price has some strong support at $6,200, $5,850, and $5,350.
In the coming hours, the traders are advised to keep an eye on the shorter time frame buy and sell volume to determine whether the price will either hold $6,600 or pullback from the upper Bollinger Band arm to retest $6,400 where the Bollinger Band moving average is.
In the case that the price drops below the 20-MA of the indicator, then a retest of the $6,200 support that is slightly above the lower Bollinger Band arm.