Bitcoin Dominance (BTCD) is recovering from long-term support

Bitcoin Dominance (BTCD) has created a double bottom pattern near the long-term support area of ​​39.50%.

It then broke a descending resistance line and is moving towards the 44.50% resistance area.

Long-term double floor

The BTCD has fallen since hitting a high of 73.65% in January. It hit a low of 39.66% so far on May 19th.

After the impact, it has returned to its old levels and will likely create a false floor. While this pattern is linked to a bullish divergence in the RSI, the MACD is still bearish.

In addition, the recovery has so far been weak.

Hence, while a bullish pattern is likely, the bullish reversal has yet to be confirmed.

BTCD weekly chart | Source: TradingView

Future BTCD movement

The daily chart shows that after the recovery noted above, BTCD is breaking above a descending resistance line.

The indicators are turning up but have yet to confirm the bullish reversal. MACD and RSI are both rising, but the former is still in negative territory while the latter is below 50.

There is a very strong resistance at 44.50%. It is generated by the 0.5 Fib retracement resistance, the supertrend line (red) and the horizontal resistance area.

Hence, the trend cannot be viewed as bullish until this zone has recovered.

BTCD daily chart | Source: TradingView

Count waves

The most likely wavenumber indicates that a sustained decline is part of the fifth wave (orange) of a bearish pulse.

The most likely downside target for this move is between 33.89% and 35.85%. The target is found using the outer retracement on wave four (black) and the length of wave one (orange).

This should lead to a new all-time low, after which BTCD could initiate a significant upward move.

BTCD daily chart | Source: TradingView

You can see the coin prices here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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