On Thursday, April 2, Bitcoin (BTC) price continued the rally it started in the late evening on Wednesday.
As reported earlier by Cointelegraph, Bitcoin price briefly consolidated around $6,650 before breaking out to tackle the $6,900 resistance and as predicted in a previous analysis, the price quickly rose to $7,200 before pulling back sharply.
Crypto market daily price chart. Source: Coin360
Analysts are calling for a retest of lower support at $5,800-$5,800 but at the moment traders continue to buy into dips and this is resulting in the price holding $6,800. Given that the price has lately taken to bouncing off the ascending trendline a retest of underlying support at $6,600 and $6,330 seems more likely.
BTC USDT 4-hour chart. Source: TradingView
The volume profile visible range (VPVR) shows a volume gap from $6,540-$6,370 so if Bitcoin fails to hold the $6,600 support the former support at $6,400 is less likely to hold. A surge in sell volume would likely lead to the price slicing through this zone and possibly through the high volume node at $6,330, hence the call by analysts for the price to revisit to the support at $5,800.
Since pushing right to the top of the resistance cluster at $7,200 the price has notched lower highs on the 4-hour timeframe but the sell volume that quickly pulled the price from $7,200 has ebbed away and as the price pulls closer to $6,700 there is an increase in the money flow shown by the Chaikin Money Flow oscillator.
The CMF is above 0 and the increase, along with the long shadows and higher lows of the last 3 candlesticks on the 4-hour timeframe show bulls are buying on the dips to support the price above $6,600. The decline in selling volume also supports this observation.
BTC USDT 4-hour chart. Source: TradingView
The price is above 20-MA of the Bollinger Band indicator at $6,600, a point also aligned with the ascending trendline, and at the time of writing the 4-hour Relative Strength Index is at 66.
Thus, traders can watch to see if the downward curve flattens or begins to pull up along with an increase in purchasing volume on the shorter timeframes. If this doesn’t happen then a retest of the aforementioned underlying supports seems likely.
Looking forward
Ultimately, the Wednesday and Thursday rallies did well to bolster Bitcoin’s momentum, allowing the cryptocurrency to push through key overhead resistances and turn a few to support.
BTC USDT daily chart. Source: TradingView
On the daily time frame one can see that the price continues to form higher lows and even with a retest of underlying supports as low as $5,800, the price is gearing up for a retest of the $7,200 resistance where there is a high volume VPVR node.
Once the price pushes through the $7,200-$7,400 zone there is a volume gap, which if exploited, would see the price rise to $7,700. While this level is close to setting a monthly higher high above $7,950, the 50,100, and 200-day moving averages are all close overhead and will likely be a challenge to overcome.
While it could take longer than one expects, a move above the 100 and 200 day moving averages would signal that Bitcoin has turned bullish on a macro level and sustained trading above $8,500 would provide even stronger confirmation.
For the short-term, traders can simply watch to see if the price holds above the ascending trendline and whether dips continue to be brought up as this is a sign of strength.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.