Bitcoin (BTC) price rallied above the $5,500 resistance on March 19, overtaking $6,000 as the digital asset stampeded to $6,359. The 18%+ rally restored more than $800 in value to Bitcoin price.
Since last week’s catastrophic 50% correction, Bitcoin price has recovered by 40% off its low at $3,775. Traders will now watch to see if the previous levels of resistance at $5,500, $5,900 and $6,300 will function as support.
Crypto market weekly performance. Source: Coin360
Currently, traditional markets are also performing well as the S&P 500 is up 2% and the Dow has gained 1.6%.
Generally, markets seem pleased that the European Union proposed a 750 euro stimulus package which would see $820 billion worth of private sector and government debt purchased before the end of 2020. This comes just a day after the Trump Administration announced support for a $1 trillion coronavirus stimulus package which would support similar bailouts.
Bitcoin vs S&P 500. Source: Skew.com
Interestingly, aside from today’s stellar performance, major equities markets continue to struggle as Bitcoin is in the midst of a strong recovery. Data from Skew shows that even though Bitcon price action has been in tandem with major markets, the digital asset now appears to be breaking this trend and decoupling from the performance of the S&P 500.
As mentioned in yesterday’s analysis, Bitcoin price took the bullish route and pushed above the pennant trendline and $5,500 resistance on a high volume surge which allowed the digital asset to form a daily higher high at $6,359.
BTC USDT 4-hour chart. Source: TradingView
For the last few days traders have expressed their belief that $6,300 would provide some push back and currently the price is meeting resistance at this level. The increase in sell volume and overbought RSI suggest that some traders who opened positions in the $3,770 to $5,000 range are now taking profits and the best step going forward would be to see Bitcoin consolidate in the $5,800 to $6,100 range just to re-establish support here.
BTC USDT 1-hour chart. Source: TradingView
On the 1-hour and 6-hour time frame there is a tweezer-top forming, suggesting that the price will pull back possibly to retest 5,900, a former resistance, which must now function as support. For the time being, traders should keep an eye on trading volume to observe whether or not traders quickly buy into pullbacks at the underlying levels of support.
Bitcoin weekly price chart. Source: Coin360
Altcoins also benefited from Bitcoin’s surge with many rallying by double digits. Ether (ETH) rallied 18.72%, XRP gained 13.72%, and Bitcoin Cash (BCH) and Bitcoin SV (BSV) added 24.30% and 32.67%.
The overall cryptocurrency market cap now stands at $173.7 billion and Bitcoin’s dominance rate is 64.8%.