The Bitcoin dominance rate (BTCD) has been declining after being rejected by the 48% resistance area and is showing bearish signs on the weekly and daily time frames.
In the period between May and December 2021, BTCD formed a triple bottom pattern inside the 40% long-term support area. The triple bottom is considered a bullish pattern, which means it leads to a breakout most of the time.
Furthermore, the pattern is aligned with the weekly RSI (Green Line) with a bullish divergence.
This led to an initial upward move that propelled BTCD to a high of 48.45%. However, the 48% area initiated rejection (red icon) and the Bitcoin dominance rate has been declining since then.
An interesting development is that the divergence (green line) trend line has now been broken, with the RSI falling below 50.
Both of these are considered bearish trend signals, which means they can lead to lower prices. So, this could mean that BTCD will drop into the 40% support area and potentially break out.
future movement
cryptocurrency trader @Eliz883 Tweeted a chart for BTCD, noting that it is trading just below resistance at 43%.
Since then, BTCD has broken above an ascending support line and later validated it as resistance (red sign). This is a bearish signal with support from the bearish readings on the daily time frame.
Additionally, the daily RSI is below 50, which is another sign of a bearish trend.
As a result of these readings, a decrease of at least 40% is expected.
ETH/BTC
ETH broke out of an ascending parallel channel in early May and hit a June low of 0.049. However, it later retested the 0.056 support area and is in the process of retesting the support line of the channel.
Moreover, the weekly RSI is in the process of moving above 50 and breaking its bearish divergence trend line (Green Line).
If ETH retests the support line of the channel, the trend is considered bullish.
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