Bitcoin Dominance (BTC.D) Appears To Have A Reversal Signal, Is The Mini Altcoin Season Happening?
The Bitcoin Dominance (BTC.D) has been rejected by a long-term resistance zone, creating a bearish hammer candlestick. It is expected to decrease in the near future.
Long-term trading range
BTC.D has been trading within a range of 39% to 48% since early May 2021. The price has repeatedly tested the support and resistance levels of the range.
After bouncing up from the 39% zone on September 9, 2022, BTC.D rose to the resistance zone at 48.5%, where it often leads to a trend reversal to the downside.
Indeed, this rate has been rejected by the resistance zone and has created a bearish hammer candlestick with a very long upper wick. This action occurred simultaneously with the weekly RSI indicator dropping below the overbought zone, which has started the sharp declines in previous instances (red arrows).
Therefore, BTC.D is likely to drop to the 43%-44.7% zone, created by the 0.5-0.618 Fibonacci retracement support zone and the horizontal support zone.
Double top pattern
BTC.D has created a double top pattern within the 48.5% resistance zone. This is a bearish pattern, often leading to a trend reversal to the downside. Furthermore, this pattern is combined with a significant bearish divergence in the daily RSI indicator, further reinforcing the pattern’s strength.
The index is currently breaking down below the neckline of the pattern at 47%. Breaking this level will confirm the pattern and cause BTC.D to drop to the nearest horizontal support zone at 44.5%.
Overall, the most likely prospect suggests that BTC.D will drop to at least 44.5%.
Since BTC.D reflects the dominance rate of Bitcoin in the cryptocurrency market, this could help altcoins recover in the near future.
This view will be invalidated if BTC.D breaks above the resistance level at 48.5%.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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