As the Bitcoin Dominance Rate Decreases, Major Altcoins Could Move Upwards

Trader @Pentosh1 stated if the BTC dominance rate decreases below the 63% level, we could see a rapid drop that would be great for altcoins:

This chart has done wonders for me + saved me a ton of money. It’s also helped with timing (See thread it’s caught top/bot) I’m going to start being extra cautious here. It’s not truly confirmed. It has to break that 63% dom area to run wild. Time to pay attention.

The BTCD has been following a descending resistance line since September 2019. Until now, the price has touched it three times, creating three lower highs. While the price is still trading inside the 66.5% support area, it has recently lost the support of the 200-day moving average (MA) and is possibly in the process of validating it as resistance. Therefore, this could cause a price decrease below the 66.5% support area, especially if the MA is not reclaimed.

In the long-term, we can see that the potential for a continued decrease is there. If the rate breaks down below the minor support area outlined in the previous section, it is likely to continue decreasing until it reaches the major support at 63%. The rate has not traded below this level since May 2019. As stated in the tweet, a decrease below this level would likely take the rate all the way to 52%.

If this outlined decrease occurs, it would have a positive effect in the price of altcoins, several of which have already begun to move upwards. Below, we will take a look at two major altcoins that have yet to begin their upward movements.

Litecoin (LTC)

The Litecoin price has been decreasing rapidly since the beginning of May. Furthermore, the price has decreased below the ₿0.0055 level and validated it as resistance afterwards. This level acted as support for the entirety of 2020, so a breakdown below it is a major bearish development. While the price has possibly created a double bottom and generated bullish divergence, it is considered bearish until it flips this area as support.

XRP (XRP)

Similar to Litecoin, XRP has broken down below an important support level at 2,450 satoshis. After validating it in the form of a long upper wick, XRP has resumed its downward movement. The outlook for XRP looks even more bearish because of the previously mentioned long upper wick and the lack of bullish divergence in the RSI. However, the 2,450 satoshi resistance area is relatively close to the price, so if the price successfully reclaims it, it would be a major bullish development.