BTC Dominance (BTCD) Resumes Climb Toward 50%

The BTC dominance rate (BTCD) has been increasing since bouncing on May 19, 2021. 

It’s approaching a descending resistance line and a significant resistance area near 52%.

Long-term BTCD movement

The BTC dominance rate has been decreasing since reaching a high of 73.63% in December 2020. So far, it has reached a low of 39.66% on May 19, 2021. 

BTCD has bounced at the 39.50% support area and has reached a local high of 48.69%. The closest resistance area is found at 52.60%, created by the 0.382 Fib retracement resistance level. 

On the other hand, the next support area is found at 36%. 

Technical indicators are providing some bullish signs. The MACD has generated a higher momentum bar while the RSI has crossed above 30 (green icon). Furthermore, the Stochastic oscillator has halted its decrease and now has a neutral slope. 

Therefore, while there are bullish reversal signs in place, a bullish reversal is not yet confirmed.

Cryptocurrency trader @Pentosh1 outlined a BTCD chart, which shows an upward movement towards 52%. As outlined above, this is the 0.382 Fib retracement resistance level.

Descending resistance

A look at the daily chart shows that the BTCD has been following a descending resistance line since January 2021. It was rejected by it on March 24, leading to the aforementioned low. The line is currently near 49%.

Technical indicators are mixed. The Stochastic oscillator has made a bullish cross, the RSI is above 50, and the MACD is increasing. All of these are bullish signs.

However, the Stochastic oscillator has also generated a bearish divergence (blue line). In addition, the RSI has generated a hidden bearish divergence (red line).

Therefore, similar to the weekly time frame, the daily chart is not sufficient to determine the direction of the trend.

The two-hour chart shows clearer weaknesses. 

Both the MACD and RSI have generated a bearish divergence and the BTCD is approaching resistance at 47%. 

Therefore, a short-term rejection is expected.

BTCD wave count

The wave count suggests that the ongoing downward move is part of a bearish impulse (orange). 

Currently, the BTCD is in wave four. A potential target for the bottom of the move is found at 27.80%. This would be a new all-time low.

The first part of the bounce (highlighted in green) looks like a three-wave structure. Therefore, it’s unlikely that this is the beginning of a new bearish impulse. 

However, the second part of the upward move (green icon) looks impulsive. 

This means that the pattern will most likely play out as an A-B-C corrective structure (black).

A potential target for the top would be at 50.55%. This would give waves A:C a 1:1 ratio, and would touch both the resistance line of a parallel ascending channel and the previously outlined descending resistance line. 

Following this move, another decrease would be likely.

For BeInCrypto’s latest BTC (BTC) analysis, click here.

The post BTC Dominance (BTCD) Resumes Climb Toward 50% appeared first on BeInCrypto.

Source