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Long-Term Divergences Increase Bitcoin Dominance Rate

  • The 39.50 percent horizontal support area has been regained by BTCD.
  • Long-term signs point to a positive future.
  • At 42.5 percent and 44.5 percent, there is resistance.

The bitcoin dominance rate (BTCD) is approaching a key resistance level, a break of which would signal the end of the long-term downward trend.

Since Jan 16, when it hit a low of 39.25 percent, BTCD has been trending upwards. It had just broken down from a horizontal area of 39.50 percent at the time. However, it has since regained the region, reaching a high of 42.83 percent on February 8.

After that, the 0.382 Fib retracement resistance level, which is at 42.5 percent, rejected BTCD. If it manages to break through, it will face stiff opposition at 44.5 percent. This is a descending resistance line that coincides with the 0.618 Fib retracement resistance level.

A chart of BTCD was tweeted by cryptocurrency trader @eliz883, indicating that a spike to 48 percent is expected.

BTCD increase


Because of the significant overhead resistance, a thorough examination of technical indicators is required to evaluate whether BTCD will make it there.

Readings of technical indicators

Both the MACD and the RSI are indicating indicators of weakness on a daily basis.

The MACD, which is made up of a short and long-term moving average (MA), is falling. This indicates that the short-term MA is slowing down in comparison to the long-term MA, which is an indication of weakness.

In a similar vein, the RSI, a momentum indicator, is decreasing. The fact that it is over 50 is positive, but the drop is considered as a sign of weakness.

BTC Long-term


BTCD movement over time

The fact that the rise since January 4 resembles a five-wave upward movement is an intriguing development.

If this is right, BTCD is in wave four of this rise.

Near 43.4 percent would be the most likely goal for the upward movement’s peak. The 1.61 external Fib retracement on sub-wave four (black) and the 0.618 length of waves 1-3 are used to find the goal (white). The objective is also close to the 44.5 percent resistance area that was previously identified.

BTC Count

The fact that the rise has taken the form of a five-wave upward movement indicates that the low has been reached.

Readings from the weekly time frame back this up.

Both the RSI and the MACD have produced large bullish divergences, which is unusual in the weekly time frame.

As a result, it’s probable that the BTCD’s downward trend, which began in January of 2021, has come to a stop.


Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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