Yesterday was some other abysmal day for the S&P 500 and Dow as both markets dropped 5.18% and 6.30%, nearly erasing the entirety of the gains each market place accrued since Donald Trump took role on January, xix, 2017.

To date, the unrelenting downturn in equities markets continues even every bit the Trump Administration attempts to calm the public by holding daily press conferences at the White House which are headed by the Coronavirus Task Force.

Earlier in the twenty-four hour period U.Due south. lawmakers approved the Coronavirus relief bill which when signed past the president volition provide furloughed American workers with upwards to two weeks of paid sick and family unit leave, along with free COVID-19 testing for those showing symptoms related to the virus.

Meanwhile, volatility indexes like the VIX, TVIX and UVXY soared to new highs not seen since the 2008 fiscal crisis. What is clear is that market participants remain fearful of the long-term effects of the current economic shutdown and investors are beginning to go the sense that the COVID-19 crisis will not be cured by quantitative easing, stone lesser interest rates and massive corporate bailouts.

Crypto market daily price chart

Crypto market daily price chart. Source: Coin360

Afterward falling 50.8% final week, Bitcoin (BTC) price appears to have found solid basis and the cryptocurrency has held the $5k mark quite well this week. This is a rather interesting turn of events considering that concluding week analysts were lamenting how the digital asset fell in tandem with markets, a complete inversion of the argument that Bitcoin is inversely correlated to major markets.

BTC USDT 4-hour chart

BTC USDT iv-60 minutes nautical chart. Source: TradingView

Even though the price dropped to $5,009, Bitcoin has held the $five,050 to $5,400 range, trading as high as $5,436 today. The 4-hour timeframe shows the toll consolidating into a tighter range within the pennant.

Earlier in the day the 12-menstruation moving average too crossed to a higher place the 26-MA but at the time of writing the 12 is curving back downward toward the 26-MA as the MACD histogram shows a slowdown in momentum and the RSI is pulling dorsum to 46.

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

Currently the price is supported at $5,158 which lines up with the lower Bollinger Ring arm and a high volume node on the volume profile visible range. Below this level $4,800 and $4,400 are each support.

All of the factors mentioned in a higher place suggest Bitcoin is preparing a larger motility and despite holding a pattern of higher lows, the price remains capped at $five,415 and $5,500.

Bullish scenario

A bullish outcome would involve Bitcoin price pushing to a higher place the $5,500 resistance at the overhead trendline of the pennant to flip the level from resistance to back up then seeking a daily higher high above $five,900.

As mentioned in previous analysis, $6,300 is expected to nowadays resistance simply in a higher place this bespeak there is a gap on the VPVR which traders could push to the mid $seven,000s on a high volume breakout.

A toll rejection in the $6,300 to $6,400 region is also an acceptable scenario as Bitcoin would at to the lowest degree accept made a leg up and can consolidate in this higher range.

Bearish scenario

A surly scenario would see the price drop below the $5,158 support and possible below the pennant to the previously mentioned supports at $4,800 and $4,400. Traders issuing calls for the cost to drop below $3,000 have likely fatigued together a thesis which begins with measuring the entry to the bearish pennant from $6,300 to $3,775 then adding the length of this pullback to the the vertex of the pennant, bringing the post-breakdown price to $ii,678.

Of course, this could happen, particularly considering the recent potent correlation of Bitcoin to equities price action, merely information technology's good to remember that Bitcoin remains oversold on the higher timeframes.

During last week'south calamity the toll bounced right at a VPVR need area at $3,775.This expanse too functioned as a long-term support zone from belatedly Dec 2018 to belatedly March 2019 when Bitocin finally reached a bottom and then rallied in April 2019.

The views and opinions expressed hither are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. Y'all should conduct your own research when making a decision.