Bitcoin Dominance (BTCD) could fall to 2018 lows
Bitcoin Dominance (BTCD) failed to sustain its uptrend and may tumble to its January 2018 lows.
BTCD has been plummeting since January 2021 when it just peaked at 73.63%. Since early May, it has been hovering just above the 40% horizontal support area that has been in place since 2018.
While this zone helped the price bounce twice, the second bounce was weaker than the first, which is a sign of weakness.
In another bearish move, last week’s close (red icon) was the lowest since 2018.
Technical indicators give mixed signs. Despite a significant bullish divergence forming on both the RSI and MACD (green line), both indicators are still in negative territory.
Therefore, the weekly time frame does not provide consistency for the direction of the trend but favors the downtrend.
Trader @Mesawine1 tweeted a BTCD chart and said it is likely to drop to a new all-time low.
Due to the ambiguity of the weekly time frame, it is necessary to look at the daily time frame to determine the direction of the trend.
The source: Twitter
The daily time frame suggests that BTCD is more likely to fall further than recover.
The first reason is that it looks like BTCD has fallen below the 40% zone. Now the price seems to be about to confirm it as resistance (red icon). This is a bearish development that usually leads to a continuation of the downtrend.
Second, the MACD has created three bars of lower momentum in a row and has almost entered negative territory. Furthermore, the RSI has fallen below the 50 line after moving sideways above it (red circle). All of this suggests that a downtrend would be the most likely scenario.
BTCD daily chart | Source: TradingView
With BTCD bullish in the short-term, the most likely scenario is for it to surge into the 0.5-0.618 Fib resistance area at 40.2-40.4% before falling back to the 35.5% lows.
BTCD 2 hour chart | 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.
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