Bitcoin Dominance (BTCD) Continues Slipping Back to Support Levels

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In Brief
  • The Bitcoin Dominance Rate is following an ascending support line.

  • There is support at 63.5% and 65.5%, and resistance at 68.5%.

  • Daily indicators are bearish but short-term signals are bullish.

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The Bitcoin Dominance Rate (BTCD) has been decreasing since Jan. 3 but is approaching a strong support level at 63.5%.

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While a short-term bounce could occur, BTCD is expected to eventually reach this area.

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Bitcoin Dominance Continues Slipping

BTCD has been falling since Jan. 3, when it was trading at a high of 73.63%.

The decrease has been swift, and BTCD has already reached the 0.5 Fib retracement of the entire upward move measuring from the Sept. 2020 lows, found at 65.44%. The next support area is found at 63.51%, the 0.618 Fib retracement level.

While BTCD is following an ascending support line, the exact slope of the line cannot be determined due to numerous long lower wicks.

Technical indicators in the daily time-frame are decisively bearish, indicating that the downward movement is likely to continue at least to 63.51%.

BTCD Chart By TradingView

Short-Term Movement

The shorter-term chart is more bullish since there is a pronounced bullish divergence in both the RSI & the MACD. This suggests that an upward move is likely, at least in the short-term.

Nevertheless, BTCD is clearly still in a downward trend and will be in one until it reclaims the breakdown level at 68.5%.

BTCD Chart By TradingView

BTCD Wave Count

Cryptocurrency trader @TheEWguy stated that the price is in a bearish impulse and is expected to continue falling towards 63%.

Source: Twitter

It is likely that BTC is in the C wave of an A-B-C corrective structure (shown in orange below), currently being in sub-wave 3 (black).

It does seem that BTCD is in sub-wave 3 as outlined in the tweet.

If waves A:C have a 1:1.61 ratio, which is common in such corrections, BTCD would reach a low of 62.5%, aligning with the 0.618 Fib retracement level outlined in the first section.

An increase above 68.2% would confirm that the correction has ended.

BTCD Chart By TradingView

Conclusion

While a short-term bounce is expected, Bitcoin Dominance is likely to resume its downward movement toward 62.5%-63.5%.

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 is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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