The Bitcoin Dominance Rate (BTCD) has been decreasing at an accelerated rate since the beginning of July. The decrease should continue until the rate reaches the closest support area at 62.5%.
Current Support
At the beginning of July, the BTCD broke down from a rising support line that had previously been in place since February 15. After breaking down, the price validated the line as resistance and has been declining at an accelerated pace since. The closest support area is at 62.5%, the beginning of the rising support line. Technical indicators are bearish but don’t write off the chance for a reversal just yet. The RSI is deep in oversold territory but has not generated any type of bearish divergence yet. The last time the RSI was this oversold, the rate began to move up alongside the ascending support line. While the 50 and 200-day MAs have made a bearish cross and are providing resistance to the price, the price has dropped considerably below both, suggesting that the short-term decline is overextended.
Relationship to Bitcoin
The BTCD (candlesticks) and the Bitcoin price (blue) are shown in the image below. In a 30-day period from April 20 to May 29, the BTCD and BTC price had a positive relationship, shown by correlation coefficient (CC) values near 1 at the bottom of the chart This means that an increase in one caused an increase in the other. However, since then, the relationship has become negative. While there have been some periods of a positive relationship, as the histogram shows, the CC is currently near -0.5, indicating a negative relationship. Therefore, in order for the BTCD to drop to the support area outlined, the BTC price would have to increase.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona 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.
(I do not have a discord and will not contact you first there. Beware of scammers)
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona 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.
(I do not have a discord and will not contact you first there. Beware of scammers)
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