Bitcoin Dominance Rate (BTCD) regaining strength but still facing resistance
The BCTD follows a long term descending resistance line, as well as a short term second.
Technical indicators are uncertain with a bearish tilt, especially in the short term.
BTCD rose during rapid increases in the price of BTC
The Bitcoin Dominance Rate (BTCD) may have increased over the past week, but it has not yet passed a crucial resistance level, and below which the trend is still considered bearish.
In September 2019, the BTCD peaked at 73.02% but has since declined below a descending resistance line.
The rate has now fallen below the 62% area, which twice resisted in 2018 and 2019, before serving as support in January 2020.
BTCD in a delicate situation
If the BTCD does not regain this area, it would suggest that it has relapsed within its previous range and could decline as much as 53%.
Technical indicators are showing signs of a turnaround. The weekly RSI shows a bullish divergence, in addition to is in the oversold region. In the last divergence, although it was bearish, the rate had just reached the aforementioned high of 72%, and then began its current decline. At the time, however, this was a triple divergence, while the current divergence is double.
Neither the MACD nor the Stochastic Oscillator are giving us any sign of a turnaround. On the contrary, the Stochastic Oscillator rejected a bullish cross.
Crypto trader @ anbessa100 shared a BTCD chart showing the rate is up from its low at 59% the week of September 6-13. She predicts, however, that the BTCD will soon reach resistance, before declining.
BTC’s dominance rate is also following a shorter-term descending resistance line established since May. This line is reinforced by the 50-day moving average (MA), which has so far rejected the rate five times.
Technical indicators are mixed. The Stochastic Oscillator has formed a bullish cross and is now rising, but previous similar events have not produced significant gains. The RSI has generated hidden bearish divergences.
There is therefore not enough data to indicate that a turnaround could take place.
The short-term chart is bearish. The BTCD started to decline after the RSI generated bearish divergences. The MACD is also in decline and the Stochastic Oscillator has formed a bearish cross.
If the 0.618 fibonacci level of the recent rise (to 60.10%) does not hold up, it would drastically reduce the chances of the upward movement resuming. A decline below 59% would practically confirm that the rate will continue to decline.
Since the rapid decline at the beginning of September, the BTCD has shown a gradual decline as the price of Bitcoin has risen .
Having said that, since BTC accelerated its upward movement, BTCD has also started to rise.
This is a common situation, where sudden movements in the price of BTC cause the BTCD to rise. Conversely, a consolidation of the price causes a decline in the rate.
Bitcoin’s price is shown in blue in the graph below: