The Bitcoin (BTC) price saw a strong recovery after bouncing from support on April 26.
However, BTC was rejected by a short-term resistance level just shy of $56,000.
BTC resumes bounce
BTC has resumed the bounce from April 26. The bounce began at a confluence of Fib support levels between $46,900-$47,725. The area is created by the 0.5 long-term Fib (orange) and 0.786 short-term Fib (black).
So far, it has reached a local high of $55,738.
An interesting development is the bullish reversal signal in the MACD.
Despite this, the RSI and Stochastic oscillator are still bearish.
Short-term BTC rejection
The shorter-term chart is showing weakness.
Firstly, the price was rejected as soon as it reached the 0.5 Fib retracement resistance at $55,565 (black).
Furthermore, both the RSI and MACD have generated considerable bearish divergences.
If the price corrects, the three closest support levels are found at $52,381, $51,349, and $50,317. These are created by the 0.382, 0.5, and 0.618 Fib support levels. The 0.5 Fib is also a horizontal support area, making it very likely to act as the bottom.
The Bitcoin Dominance Rate (BTCD) is also showing signs of a reversal. Both the MACD and RSI are moving upwards, and the latter has generated a bullish divergence.
A breakout above the current descending resistance line could cause a significant upward movement.
A look at the relationship between BTCD (green) and BTC (orange) does not show a clear relationship. However, sharp BTC price movements have caused a movement in the opposite direction for BTCD (highlighted in red).
This is also evident by the correlation coefficient, which is now negative (red).
Therefore, a retracement could cause the aforementioned increase in BTCD.
BTC is expected to continue retracing towards one of the Fib retracement support levels. This could cause an uptick in the BTCD.
For BeInCrypto’s previous bitcoin (BTC) analysis, click here.