Bitcoin Dominance (BTC.D) Breaks Long-Term Resistance, Altcoin Sell-off Just Begins
The Bitcoin dominance (BTC.D) is breaking out above a long-term resistance zone. If it does so, the upward momentum could accelerate in the coming days.
Long-term trading range
Bitcoin dominance (BTC.D) has been trading within a range of 39% to 48.5% since the beginning of May 2021. The price has tested the support and resistance of this range multiple times.
After bouncing from the 39% level on September 9, 2022, BTC.D reached the resistance zone at 48.5%, which often leads to a trend reversal to the downside (red arrow).
However, instead of declining after being rejected by the 48.5% resistance, BTC.D has consolidated just below this level and is currently breaking out above it. If successful, it could quickly rise to the next resistance zone at 58%, determined by the range’s target and horizontal resistance.
The weekly RSI indicator supports the breakout potential as it maintains a bullish structure and approaches the oversold region.
Daily outlook
The daily chart shows BTC.D has been trading within a symmetrical triangle during the period it was rejected by the 48.5% resistance. This is a neutral pattern but often results in the continuation of the previous trend.
Indeed, BTC.D has broken out above this pattern today, signaling the continuation of the upward trend.
The daily RSI indicator has also surged into the overbought region, indicating that the bulls are in control of the market.
Therefore, BTC.D is likely to continue its upward movement in the near future.
Conclusion
The most likely scenario suggests that BTC.D will break out above the 48.5% resistance and rise further. The highest target for this move is 58%.
Since BTC.D represents the dominance ratio of Bitcoin compared to the cryptocurrency market, this could potentially lead to further sell-offs in altcoins.
This perspective would be invalidated if BTC.D falls back below 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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