The bitcoin dominance rate (BTCD) has been falling since its rejection on 11 June. However, the conditions are ripe for continuation of the long-term bullish trend.
BTCD formed a triple bottom pattern between May-December 2021 at the 40% long-term support area. The triple bottom is considered a bullish pattern, which means it leads to breakouts most of the time.
Additionally, the pattern was coupled with a bullish divergence in the weekly RSI, adding to the validity of the pattern. Besides, the bullish divergence trend line is still intact and the RSI is in the process of rallying above the 50 line. Therefore, conditions exist for the weekly RSI to continue bullish.
If the reversal continues, the nearest resistance will lie at 52.3%. This is the 0.382 Fibonacci Retracement resistance level when measuring the overall decline.
BTCD gets rejected
cryptocurrency trader @CryptoGemsMiner Tweeted a chart of BTCD which shows a continued rejection.
The daily chart shows that BTCD has been rising at an accelerated rate since breaking above a descending resistance line on May 11. It reached a high of 48.45% on June 11. Later, it was rejected (red mark) and fell sharply .
It is currently trading at 43.50%, a level that is both a horizontal support area and a 0.5 Fibonacci retracement support level to gauge the most recent rise. Therefore, it is possible that it will initiate a reversal, at least in the short term.
If there is a bounce, the two-hour chart shows the nearest resistance area at 46%. This is the 0.5 Fibonacci Retracement resistance level and a horizontal resistance area.
Should BTCD manage to recover or get rejected, it could determine the direction of the future trend.
The weekly chart looks bearish, which aligns with the fact that the weekly BTCD chart looks bullish.
ETH has been declining since deviating above the 0.0765 resistance area (red circle). Later, ETH broke out of a long-term rising parallel channel while the RSI declined below 50 (red sign). All these are considered to be bearish signals.
ETH rebounded from the 0.5 Fibonacci retracement support level at 0.052. Hence, although it is possible that it will initiate a bounce, possibly validating the channel as resistance, and a downside correction towards the 0.618 Fibonacci retracement support level at 0.044 is still possible.
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