Bitcoin Dominance (BTCD) Surges, Ushering in Strong Uptrend

Bitcoin dominance (BTCD) recovered just before hitting an all-time low and is likely to usher in a new uptrend.

It is possible that BTCD has bottomed out and will rise after a short-term correction.

BTCD breaks out

On September 17th, BTCD broke out of the descending resistance line that had existed since July 30th. This shows that the previous downtrend has ended and the BTCD trend is now bullish.

More importantly, BTCD managed to move above the critical resistance area of ​​44.5%. This area is important as it is the 0.5 Fib retracement resistance and is in line with the Supertrend resistance line.

Supertrend is an indicator that uses absolute high and low prices to determine the direction of the trend. Since BTCD is currently above the supertrend line, the trend is considered bullish.

It remains to be seen whether the 44.5% zone will act as support.

Technical indicators are also increasing. MACD is in positive territory and increasing. This means that the short term trend is faster than the long term trend. The RSI has moved above 70. This is an indication that the trend is up, albeit in the overbought area.

As a result, the technical indicators in the daily timeframe show that the trend is bullish.

BTCD daily chart | Source: TradingView

Short term movement

The six hour short term chart supports the continuation of the uptrend as it shows that BTCD is breaking across a short term ascending parallel channel.

Such channels often contain corrective movements. In this case it means that the rally is a correction and the downtrend will continue after that.

However, instead of breaking under the canal, BTCD broke out over it and then recovered.

There is strong support at 43.6 and 42.8%. The first zone is created by the 0.5 fib retracement level and the center line of the canal. The second level is created by the .618 fib retracement level.

A decline among the latter casts doubt on the positive side.

BTCD 6-hour chart | Source: TradingView

Count waves

Trader @ Pentosh1 sketched the BTCD chart, suggesting that altcoins continue to bleed.

The source: Twitter

There are currently two possible wave counts.

The first scenario suggests that BTCD will see one more drop before bottoming out.

It shows that BTCD is in the fifth and final wave of the downtrend that has been going on since January.

The most likely goal for the bottom of the exercise is between 34-36%. The target is found using the outer fib retracement level on wave four (black) and the length of wave one (orange).

BTCD daily chart | Source: TradingView

However, a closer look shows that wave 5 has been completed. This means that the downtrend may have ended.

Combined with indicators rising out of the daily timeframe, this scenario seems more likely.

BTCD daily chart | Source: TradingView

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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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