BTC Dominance Set Temporary Top – Altcoins Breakout?

BTC Dominance Set Temporary Top – Altcoins Breakout?

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2021-07-23 14:15:52

Bitcoin Dominance (BTC Dominance) has been following a descending resistance line since January and was rejected by it on July 20.

BTC Dominance Has Set Temporary Top – Altcoins Breakout?

It is possible that BTC Dominance has reached a local top and will soon break out of the short-term pattern.

Descending resistance line
Since January, BTCD has been falling along with a descending resistance line and has been rejected by this strong resistance 3 times (red icon), most recently on July 20.

Technical indicators in the daily timeframe are relatively neutral. The MACD has lost strength and is trading exactly at the zero line. The RSI is above 50 and while the Stochastic Oscillator has created a bullish cross as well as a bearish divergence.

Symmetrical triangle . pattern

The shorter-term H6 chart shows that BTCD is also trading inside a symmetrical triangle and is approaching the point of convergence between resistance and support. Therefore, a breakout/downward from the last pattern is expected.

While the short-term RSI is neutral, the MACD is falling and giving a bearish reversal signal. If a breakdown occurs, the nearest support will be at 43%, which corresponds to the 0.618 Fib retracement support.

Number of waves

Cryptocurrency trader @Altstreetbet outlined the BTCD chart, saying that there could be another wave of drops to new all-time lows.

The most likely wave count shows that BTCD has just completed the wave of a bearish impulse (orange).

The most likely target for the low of the entire movement is between 33.7-34.7%. The target is created using the Fib projection on waves 1-3 (orange) and by using the length of wave 1 (black).

The shorter-term H4 chart shows that the wave has the shape of a symmetrical triangle.

BTCD just completed sub-wave E and might break in the near future.

Relationship with BTC

Except for July 15-16, BTCD (orange) has had a negative relationship with BTC (blue) since July 12. This means that the increase in the price of BTC caused a drop in BTCD.

This can also be seen by the correlation coefficient, which is very close to -1, indicating a near perfect negative relationship.

If the relationship holds, BTC price will continue to rise for BTCD to drop to the set target.

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