Bitcoin (BTCD) dominance may have reached a long-term bottom
Bitcoin Dominance (BTCD) is attempting to find support after being rejected by the Fib resistance level.
Critical Support Zone
BTCD has been trading above the 40% horizontal support area since May 2021. This zone was the catalyst for the start of some upside moves.
However, BTCD fell below it on Jan 2, 2022 and appeared to have broken through (red circle). Despite the prospect of further downside, the price recovered and shortly thereafter re-entered the zone and has been moving higher ever since.
Such deviations are considered bullish developments and often lead to significant future increases.
BTCD daily chart | Source: TradingView
Recovery is in progress
Trader @Axeloncrypto tweeted a BTCD chart and said that the current resistance area at 42.5% is likely to reject BTCD.
The source: Twitter
Since the tweet, BTC has been rejected by this resistance and is falling. The 42.5% resistance area is also the 0.382 Fib retracement resistance adding to its strength.
Despite the rejection, technical indicators are still bullish. This is evidenced by the fact that the MACD is in positive territory and the RSI is above 50.
The two hour chart shows the key support levels at 41.5%, 41% and 40.5%. These are the 0.382, 0.5, and 0.618 Fib retracement support levels, respectively.
For the uptrend to continue, BTCD needs to make a higher low at one of these levels.
The weekly chart offers a bullish outlook. This can be seen as significant bullish divergence has formed on both the RSI and MACD (green line). Such divergences are often preceded by significant upward moves. The fact that the divergence appears on the weekly time frame only serves to add to its importance.
On this timeframe, the main resistance levels are at 52.5%, 56.5%, and 60.5%.
The number of waves since December 2021 further supports this possibility as it shows that a bearish 5-wave impulse is complete.
Therefore, BTCD may have reached a long-term bottom.
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.