Since topping out at $6,500 on March 31, Bitcoin (BTC) price had spent the majority of Wednesday in a steady slump which saw the price drop from $6,494 to $6,147. The pullback mirrored the poor performance in traditional markets where the S&P 500 and Dow dropped by 4.41% and 4.44% respectively.
The slump in traditional markets appeared to be a reaction to dismal news that the United States surpassed more than 200,000 Coronavirus cases. Earlier this week the White House also stated that it concurs with the estimate that up to 240,000 Americans could die from COVID-19 within the next 3 weeks.
If true, this would likely extend the time social distancing and mass quarantine policies stay in effect, leading to additional damage to the economy. As advised by many market analysts, global markets are unlikely to show signs of bottoming until the Coronavirus pandemic is brought under control.
Crypto market daily price chart. Source: Coin360
Surprisingly, shortly after equities markets closed Bitcoin price broke from the pattern of lower highs with a sharp upside move which pushed the price to $6,744.
The move came as the price was on the verge of falling below the $6,200 support to complete the right shoulder of a rather sloppy head and shoulders pattern on the 4-hour time frame.
Had that occurred, traders would be looking at a target near $5,150 so for bulls the current surge above the $6,600 resistance level is probably a welcome relief.
BTC USDT 4-hour chart. Source: TradingView
The push through the $6,250-$6,450 range brought Bitcoin above the $6,600 resistance and even though the price pulled back, traders are fighting to turn this level to support. Once above $6,600 traders will target $6,725 and $6,900.
BTC USDT daily chart. Source: TradingView
On the daily timeframe, the volume profile visible range shows that above $6,900, the $7,100 to $7,200 zone could present stiff resistance. For the short term, holding $6,600 as support then setting a higher high above $6,900 would be a positive step forward.
Alternatively, if the Bitcoin price loses momentum, a pullback to retest underlying support at $6,400 (Bollinger Band moving average) and $6,300 is likely. If the event of a stronger correction, Bitcoin price has support at $6,200, $5,850 and $5,350.
Over the coming hours, traders should keep an eye on the shorter time frame buy and sell volume to see if 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.
If the price drops below the 20-MA of the indicator then a retest of the $6,200 support which is slightly above the lower Bollinger Band arm.
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.