Bitcoin Dominance Rate (BTCD) Approaches New All-Time Low

Bitcoin Taproot Upgrade is 'Useless, Minor Improvement' of Outdated Tech, Say Critics

The Bitcoin dominance rate (BTCD) is very close to its yearly lows, and could potentially break down further, leading to a new all-time low.

BTCD has been decreasing since it reached a high of 47.72% on Oct 20. Initially, it bounced at an ascending support line that had been in place since Sept 8. However, it broke down and validated the line as resistance on Nov 26 (red circle). 

BTCD is now approaching the closest support area at 39.80%. 

Technical indicators support the continuation of the downward movement.

The MACD, which is created by a short- and a long-term moving average (MA), is moving downwards. It is also negative, which means that the short-term MA is slower than the long-term one.

The bearishness is more clearly visible in the RSI, which is a momentum indicator. The RSI has fallen below 50 and validated the line as resistance. The previous time this occurred (red icon) was on Aug 5 and preceded a significant downward movement that continued for two months.

Therefore, the daily time-frame readings suggest that BTCD will fall to the 39.80% horizontal support area.

Chart By TradingView

BTCD future movement

Market analyst @IncomeSharks tweeted a BTCD chart, suggesting that the rate is likely to continue decreasing in the future.

Source: Twitter

The longer-term weekly chart also suggests that BTCD will eventually fall to a new all-time low.

The weekly RSI has generated hidden bearish divergence (red icon), which is a bearish sign that often leads to continuation of the bearish trend. Furthermore, this divergence occurred right at the 50 line, below which the RSI has now fallen.

In addition to this, the decrease since the Dec 2020 highs looks like it still have four waves. Therefore, another final downward movement would be expected, which would complete the entire bearish formation.

A breakdown from the 39.80% support area would confirm that BTCD is heading to new lows.

Chart By TradingView

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

Source link

Be the first to comment

Leave a Reply

Your email address will not be published.