Technical indicators suggest that the Bitcoin dominance rate (BTCD) may be in the first phase of a long-term bullish reversal.
The weekly chart shows that BTCD has bounced back to the 40% horizontal support area several times in May and September 2021 and January 2022. Bitcoin dominance has not reached below this horizontal zone since the beginning of 2018.
Furthermore, technical indicators support a continuation of the rally, especially considering the bullish divergence present in both the RSI and MACD. Such divergences are somewhat unusual in the weekly time frame.
If an upward move is to take place, the first long term resistance will be found at 52.25%, formed by the 0.382 Fibonacci retracement resistance level.
BTCD Divergence and Pump
cryptocurrency trader @eliz883 Tweeted a BTCD chart saying it could move towards a descending resistance line near the 45%.
A closer look at the daily chart supports the findings of the weekly observation.
BTCD appears to have deviated below the 40% area (green circle) before retesting it later. It is also considered a bullish development and often precedes a price increase.
Moreover, BTCD soon broke a descending resistance line.
So far, it has managed to reach a local high of 43.50% but it was rejected by the 0.5 Fibonacci retracement resistance level.
Similar to the weekly time frame, the MACD and RSI are both rising and bullish. However, neither has generated any sharp divergence.
short term movement
The six-hour chart is showing a complete five-wave uptrend (black). In this pattern, waves one and five were roughly equal, while wave three was extended.
What happens after a five-wave rise is usually a correction.
Therefore, it is possible that BTCD corrects in the near term before eventually starting an upward move towards the 52.30% target.
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