Bitcoin Dominance Could Hit Rare Highs, Says Analyst

At the current time, Bitcoin’s dominance rate stands at 68.75 percent. It is possible that it will do another rapid increase, reaching 75-80 percent by January 2020. This, however, is conditional on BTC making another rapid move. If Bitcoin continues to consolidate, the dominance rate is likely to decrease. Cryptocurrency trader @galaxybtc stated that the Bitcoin market dominance has been increasing for a significant period of time and predicted a dominance rate of 75-80 percent by year’s end.

$BTC dominance road to 75-80% by EOY.

Hide yo kids hide yo wife hide yo alts. pic.twitter.com/GNIdVAkJr1

— Galaxy (@galaxyBTC) October 21, 2019

Additionally, he outlined three descending resistance lines that share similarities and all led to breakouts. At the current time, BTC is following one such resistance line. Will we again see a breakout and move towards 75-80 percent? Let’s analyze.

Descending Wedge

Looking closer at the Bitcoin price movement, we can see that, besides the descending resistance line, the current support line creates a descending wedge — which is a bullish pattern. Combined with the bullish divergence in the RSI, this makes a breakout likely. Therefore, the “75-80 percent by year’s end” prediction does not seem far fetched. However, since the dominance is not actually traded in an exchange, we want to look at the relationship between the price of Bitcoin and its dominance.

The Relationship Between Bitcoin Price and Dominance

As we can see in the image below, the Bitcoin dominance increases whenever the Bitcoin price (orange) makes a new high. Additionally, it sometimes increases even when the price makes a new low — as is visible by the red vertical line. However, when the Bitcoin price is consolidating, the dominance rate decreases. This is understandable since investors looking to make profits will transfer their funds from BTC to alternate coins. Since we believe that Bitcoin is likely to do one final downward move, it makes sense that the dominance rate will do one final push before beginning to decrease. Therefore, the 75-80 percent prediction could be validated by the end of the year. Do you think the dominance rate will reach 75 percent by year’s end? Let us know in the comments below. 

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Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.  Images are courtesy of Shutterstock, TradingView.