Exclusive Bitcoin Dominance (BTCD) Resumes Climb Toward 50%

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In Brief
  • The bitcoin dominance rate has bounced at the long-term 39% support area.

  • The BTCD is following a descending resistance line.

  • It's potentially in wave four of a bearish impulse.

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

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

Long-term BTCD movement

The bitcoin 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. 

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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.

BTCD Chart By TradingView

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.

Source: Twitter

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.

BTCD Chart By TradingView

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 Chart By TradingView

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.

BTCD Chart By TradingView

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.

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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