The Bitcoin Dominance Rate (BTCD) has been increasing since Sept. 2 and has shown several bullish reversal signs. However, it’s still trading below a major long-term resistance level.
The BTCD has moved downwards since it reached a high of 73.02% on Sept. 2019. Throughout this period, the rate has been following a descending resistance line.
In Feb. 2020, BTCD reached the 62% area and created a long lower wick, eventually moving up and validating the resistance line once more. However, in Aug. 2020, BTCD fell below this area and has been declining since.
Technical indicators on the weekly time-frame are slightly leaning bullish since the RSI has formed bullish divergence and moved outside of its oversold region. However, the Stochastic Oscillator has yet to begin moving upwards, let alone make a bullish cross.
If the rate continues falling, the next support level is found at 53%.
Cryptocurrency trader @anbessa100 outlined a Bitcoin dominance chart, stating that it has been rejected by an important resistance level and is likely to decline.
A closer look at the move doesn’t show a clear structure but reveals an upward move from a low of 57.51%, reached on Sept.2. Furthermore, the price created a bullish engulfing candlestick on Oct. 6.
The closest resistance areas are found at 61.3% and 62.6%, respectively, while there is no clear support area.
Technical indicators on the daily time-frame are bullish. All three of the: MACD, RSI, and Stochastic Oscillator are increasing, with the latter having made a bullish cross and an RSI above 50.
Therefore, a breakout towards 62.6% could occur, which would also validate the long-term resistance outlined in the first section. However, until the price breaks out from the 62% area, we cannot consider the long-term trend bullish.
To conclude, while BTCD has given bullish reversal signs, the trend cannot be considered bullish unless the rate increases above 62%.
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