Exclusive Bitcoin Dominance (BTCD) Drops to Lowest Levels Since 2018

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In Brief
  • The BTCD is trading between long-term support and resistance at 49.75% and 57.75%.

  • Long-term indicators are bearish.

  • The BTCD reached a local high of 71.30% in December 2020.

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The bitcoin dominance rate (BTCD) has broken down from a long-term support area and reached levels not seen since 2018.

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Despite some bullish signs in the short term, the BTCD is likely still mired in a bearish long-term trend. A continued decrease is likely.

Long-term BTCD levels

The BTCD has been decreasing since December 2020, when it reached a local high of 71.30%. 

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At the beginning of April, it fell below the 57.75% area. This is a level that previously acted as support since April 2019. Now, it’s likely to act as resistance.

While there appeared to be support at 53% (dashed line), the BTCD has fallen below it. When looking at closing percentages, the lowest close in 2018 was 53.35%. On the other hand, last week’s close was at 52.45%, signifying a breakdown.

The next support level is found at 49.75%. It’s both a horizontal support level and the 0.618 Fib retracement of the entire previous upward movement.  

Technical indicators are bearish. The Stochastic oscillator has made a bearish cross, the MACD is negative, and the RSI has decreased below 30.

Therefore, in the long-term, it’s likely that the BTCD falls all the way to 49.80%.

It’s possible that the current drop is a flat A-B-C structure. In this pattern, waves A:C commonly produce a 1:1.61 ratio. This would suggest a bottom at 48%. 

BTCD Chart By TradingView

Daily BTCD movement

Cryptocurrency trader @PostyXBT outlined a BTCD chart, stating that a short-term relief bounce could occur. However, he believes that the trend is still bearish.

Source: Twitter

The daily chart is showing some small bullish reversal signs. 

Firstly, yesterday’s candlestick had a bullish close (green arrow). Secondly, the MACD has created a higher momentum bar. 

The Stochastic oscillator has also begun to move upwards. Despite this, it has yet to make a bullish cross (red circle). 

Furthermore, the RSI is deep into oversold territory and has not generated any bullish divergence. 

Therefore, until the MACD gives a bullish reversal signal and/or the Stochastic oscillator makes a bullish cross, we cannot confirm a reversal. 

Chart By TradingView

Conclusion

The bitcoin dominance rate is likely to continue decreasing towards the long-term 49.75% support area. 

While some short-term relief could occur, the chances of a bullish reversal seem slim.

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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