Bitcoin (BTC) Rejected Just Short of $56,000 Level
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.
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