Bitcoin Dominance (BTC.D) has reached a strong resistance level, but there is no confirmed sign of a bearish reversal.
Long-term trading range
Bitcoin Dominance (BTC.D) has been trading within a range of 39% to 48% since early May 2021. The price has repeatedly validated the support and resistance of the range.
After bouncing from the 39% level on September 9, 2022, BTC.D has formed an uptrend structure and surged to the 48% range resistance.
However, the weekly RSI indicator has moved into overbought territory, which has often led to corrections in previous instances (red arrow).
Therefore, BTC.D is likely to be rejected by this level again. If so, it could retrace to the 43.5%-44.5% support range, formed by the 0.5-0.618 Fibonacci retracement support area and the horizontal support zone.
Short-term outlook
Since the start of the recent rally at 42.8%, BTC.D has been rising along the 2-hour MA 20 line. The price has repeatedly confirmed this line as support, so it is an important level to watch.
During that time, BTC.D also formed an ascending wedge pattern. This is a bearish pattern that often leads to breakdowns in most cases.
Breaking down the pattern will also cause a breakdown below the 2-hour MA 20 line, confirming that the rate has started to correct.
The RSI indicator supports this outlook when it forms a significant bearish divergence within the overbought zone.
Therefore, BTC.D may break down below the current pattern and fall to its bottom at 44.7%, very close to the support zone mentioned above.
Conclusion
Overall, the most likely outlook suggests that BTC.D will break down below the ascending triangle pattern and start to correct. The potential target for this correction is the 43.5%-44.5% range.
Since BTC.D represents the dominance rate of Bitcoin compared to the cryptocurrency market, this could help altcoins recover in the near future.
This view will be invalidated if BTC.D breaks out above the 48% range resistance level.
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This article was republished from azcoinnews.com
