Exclusive Bitcoin Dominance (BTCD) Continues Descent Toward New Lows

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In Brief
  • The bitcoin dominance rate is following a descending resistance line.

  • Technical indicators in the daily time-frame are bearish.

  • The BTCD is in wave four of a bearish impulse.

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The bitcoin dominance rate (BTCD) has been following a descending resistance line since Jan. 4. Most recently, it was rejected by the line on June 30. 

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Technical indicators and the trend movement support a continued decrease toward new lows.

Bitcoin dominance descending resistance line

BTCD has been moving downwards since Jan. 3, when it reached a local high of 73.63%. So far, it has touched the line multiple times, most recently on June 27. 

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Technical indicators are bearish. The MACD histogram is almost negative, the RSI has crossed below 50, and the Stochastic oscillator has made a bearish cross (red icon). 

Therefore, a breakout from this line seems unlikely. 

For a longer-term outlook, click here.

BTCD Chart By TradingView

Cryptocurrency trader @Damskotrades outlined a BTCD chart, stating that a decrease towards the 42% area would be likely. This is in line with the reading from the daily time frame.

Source: Twitter

Potential triangle

The six-hour chart shows that the BTCD is potentially trading inside a symmetrical triangle. This is normally considered a neutral pattern. It was rejected by the resistance line of the triangle on June 27 and has been moving downwards since. 

Technical indicators are bearish. Therefore, it’s likely that the BTCD will fall to the support line of the triangle.

Chart By TradingView

Wave count

The wave count suggests that the BTCD has been in a bearish impulse since the aforementioned January high. 

If this is the case, it appears to currently be in wave four (orange) of this impulse. 

The most likely target for the bottom of the movement would be between 34-35%, found by using the length of wave 1 (black) and a Fib projection of waves 1-3 (orange).

BTCD Chart By TradingView

The short-term movement is either a fourth wave triangle, in which BTCD would consolidate for a bit before breaking down, or an irregular flat correction, where it could break down immediately.

BTCD Chart By TradingView
 

Relationship to BTC

Since June 22, there has been no clear relationship between the BTC (orange) price and the BTCD. This is especially evident by the correlation coefficient (red), which is moving above and below the 0-line. 

Therefore, it has yet to be determined whether a BTC price increase could cause an upward or downward movement in the bitcoin dominance rate.

BTCD Chart By TradingView

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

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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