The bitcoin dominance rate (BTCD) rebounded slightly on May 19 but has lost nearly all of its gains since then.
Both the long and medium-term trends are firmly bearish, though a short-term bounce could transpire.
The bitcoin dominance rate has been moving downwards since December 2020, when it reached a high of 73.63%. The decrease continued until May 19, 2021, culminating with a low of 39.66%.
There are two main support areas at 39.50% and 36%. After bouncing from the former, the BTCD has returned to the level once more. The latter is the all-time low BTCD.
Technical indicators are bearish. The MACD is decreasing inside the negative territory and the RSI is below the 30-line. And while the Stochastic oscillator has stalled its decrease, it has yet to make a bullish cross nor move upwards.
As a result, we can consider the long-term trend to still be bearish.
BTCD follows descending resistance line
The daily chart shows that BTCD has been decreasing alongside a descending resistance line since January 2021. Most recently, it was rejected by the line on March 24.
Despite the previously outlined bounce, technical indicators are bearish.
The MACD has given a bearish reversal signal and is falling, the RSI is below 50, and the Stochastic oscillator has just made a bearish cross (red icon).
Therefore, the daily outlook aligns with the weekly signals, painting a bearish picture.
While the short-term chart shows a descending wedge, which is a bullish pattern, all long-term signs point to a bearish trend.
Therefore, a potential breakout from the wedge would likely only be a short-term bounce prior to another decrease.
BTCD wave count
Cryptocurrency trader @24KCrypto outlined a BTCD chart, stating that it will likely continue decreasing towards a new all-time low.
The wave count does align with this reading, suggesting that BTCD is in wave C (white). The sub-wave count is shown in orange. However, it’s not yet certain if sub-wave four has ended or if it’s still developing.
In any case, the ensuing downward movement could take BTCD all the way down to the range of 27.50%-25.40%. This target range is found using an external Fib retracement and Fib projection.