The Bitcoin Dominance Rate (BTCD) is trading at a confluence of support levels on both the weekly and daily timeframes. If the sustained upward move continues, a bounce-back to the current support level would be expected.
Between May-December 2021, BTCD formed a triple bottom pattern in the 40% long-term support area. The triple bottom is considered a bullish pattern. Thus, it is expected to lead to breakouts the vast majority of the time.
Supporting this possibility, the weekly RSI also produced a very important bullish divergence. The divergence trendline (green) is still intact, and the RSI is correcting at 50. Therefore, the current levels on the weekly chart provide a great upside potential.
So far, BTCD has been rejected by the 47.50% horizontal resistance area. If it manages to move above this, the next resistance will be at 52.30%.
future btcd movement
well-known futures traders @peterlbrandt Posted a chart of BTCD stating that a close above 50% would be a very strong signal that BTC is moving higher.
The daily chart is showing that BTCD has broken above a descending resistance line. However, after the rejection, it fell to a confluence of support levels at 43%.
This support is formed by the 0.618 Fib Retracement support level and an ascending support line.
Therefore, in line with the weekly chart, the daily chart indicates that there is a possibility of a bounce back at the current levels.
The two-hour chart supports this possibility, suggesting that there is a upside potential. This is mainly because the six-hours RSI has produced a very important bullish divergence and is now above 50.
If an upward move starts, the first resistance area will be at 45%, formed by the 0.382 Fibonacci retracement resistance level.
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