Bitcoin Dominance (BTC.D) Continues To Be Rejected By Long-Term Resistance, Any Chance For Altcoin Season?
The Bitcoin Dominance (BTC.D) has formed a bearish pattern within a significant resistance zone. Breaking below the nearest support level will accelerate the downward momentum.
Long-term trading range
The 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 usually leads to a trend reversal to the downside (red arrows).
Indeed, this ratio has been rejected by the resistance zone and created a double top. This is a bearish pattern that typically leads to a trend reversal to the downside.
Furthermore, it is accompanied by bearish divergence within the overbought region of the RSI indicator, adding to its significance.
Therefore, BTC.D is likely to decline towards the 43%-44.7% range, formed by the Fibonacci retracement support levels of 0.5-0.618 and the horizontal support zone.
The daily chart provides an unclear outlook as BTC.D still holds above the minor support level at 47% after being rejected by the 48.5% zone.
However, the RSI indicator has dropped below the descending resistance line and is below 50, showing that momentum has waned.
Therefore, BTC.D is likely to break below the minor support area of 47% in the near term.
The most probable outlook suggests that BTC.D will break below the minor support level at 47% and decline towards the significant support zone at 43%-44.7%.
As BTC.D represents the dominance ratio of Bitcoin compared to the cryptocurrency market, this could potentially aid in a strong recovery for altcoins in the coming period.
This viewpoint 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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