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Bitcoin (BTC) had been decreasing since being rejected by the $55,900 resistance area on April 28.
Bitcoin is now attempting to create a higher low after bouncing at a short-term support level. However, BTC has yet to confirm a short-term reversal.
BTC retraces after rejection
On April 28, BTC reached the 0.5 Fib retracement level when measuring from the all-time high price, found at $55,900.
It was promptly rejected, beginning the current downward movement.
So far, the price has reached a low of $52,330. It’s very close to touching the descending resistance line from which it broke out over prior.
Technical indicators are showing weakness. The MACD has created four successive lower momentum bars and the RSI is close to dropping below 50.
BTC attempts higher low
Since the rejection, BTC has been attempting to create a higher low.
Yesterday, it reached the 0.382 Fib retracement support level at $52,800 and began the current bounce.
This is the first potential level that can act as support in order to create a higher low.
If it doesn’t hold, the next support levels are found at $51,670 and $50,550.
Technical indicators are starting to show strength. The MACD just gave a bullish reversal signal and the RSI is in the process of moving above 50.
Therefore, since the readings from the six-hour time frame are neutral, it’s possible that the short-term indicators will gradually push them into bullish territory.
However, BTC has yet to reclaim important resistance areas found between $54,384 and $54,871. This area is created by the 0.5-0.618 Fib retracement levels of the most recent portion of the decrease.
Until it reclaims this area and validates it as support, we cannot consider the short-term trend bullish. In that case, a decrease towards the 0.5 Fib retracement support level from the previous chart would remain the most likely scenario.
Conclusion
Bitcoin is attempting to find support and create a higher low above the 0.382 Fib retracement level at $52,800. However, it has yet to reclaim a crucial resistance area that would confirm that the bullish reversal has begun.