BTCD rejected, offers relief rally for altcoins
Bitcoin dominance (BTCD) has risen since it hit a low in May.
Despite the rebound, it may have hit a local high and BTCD is set to hit new lows.
The downward trend continues
BTCD has been down since January 2021 when it hit a high of 73.63%. The downtrend continued until it hit a low of 39.73% in May.
BTCD then rebounded, hitting a high of 48.69% so far. The high was very close to the 0.382 Fib resistance area when the latest part of the downtrend was measured.
Technical indicators show some bullish signs like the MACD histogram and the rising RSI.
However, the RSI is still below 50 and the MACD is in negative territory. Furthermore, the stochastic oscillator has not yet produced a bullish cross.
BTCD weekly chart | Source: TradingView
Trader @Crediblecrypto claims that while BTCD is rising continuously, he predicts that it will eventually fall and hit a new all-time low. However, he suggests that he could still move into the 50-55% zone before falling. A shorter timeframe should be considered to determine if this is the case.
Descending resistance line
The daily chart shows that BTCD has been moving along a descending resistance line since the January high mentioned above.
It is now right on that resistance line and is making a third attempt to break out.
However, the technical indicators are neutral and trending downwards. The MACD is falling and is right at 0. The RSI is at the 50 line, while the stochastic oscillator has created a bearish cross.
BTCD daily chart | Source: TradingView
The most likely possibility is that BTCD is currently in the fourth wave of a bearish pulse that is triangular in shape.
While it could develop into yet another corrective pattern, the presence of a descending resistance line suggests that it has likely hit a local high.
If so, the potential ends of the downward move would be 33-34% based on the Fib projection on waves 1-3 (orange) and the length of wave 1 (colored).
BTCD 12-hour chart | Source: TradingView
Relationship with BTC
The relationship between BTC (orange) and BTCD (green) was positive from July 9th to July 12th, meaning that an increase in the price of BTC will also lead to an increase in BTCD.
However, since then it appears to have turned negative, suggesting that the rise in BTC is causing the decline in BTCD.
Therefore, in order for BTCD to achieve the goal described above, BTC has to move further up.
Hourly BTCD and BTC / USD Charts | Source: TradingView
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.
According to Beincrypto