Bitcoin Dominance Level …


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Bitcoin Dominance Level ...

Bitcoin dominance level will soon confirm the trend vector

  • Bitcoin’s dominance level is in the neutral zone between the two ranges.

  • 3-day RSI hit its lowest level since 2017 in February.

  • Bitcoin dominance breaks long-term rising support line.

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Bitcoin dominance has been on the rise since February 15th. Since then, the indicator has been in the neutral zone between the two ranges, and there is still no certainty regarding the future dynamics..

Bitcoin Dominance Level ...

Well-known cryptocurrency trader @Altcoinsherpa tweeted a post about the level of dominance of bitcoin and concluded that June will be a good time to exit positions on altcoins.

According to the trader, altcoin pumping season is coming to an end.

Below we will analyze the level of dominance of bitcoin (BTCD) and try to determine the vector of further movement of the indicator, as well as its potential impact on the pairs of bitcoin with altcoins.

Range trading

On the 3-day BTCD chart, two trading ranges can be identified, which are shown with black and white lines in the chart below.

A narrower range (white lines) is located between the 52.5 and 62.5% levels, and the second, wider range (black lines) runs at 39.5-69.5%.

On February 15, the indicator reached a narrower range resistance line at 62.5%. At that time, the RSI hit a 2017 low and was deep in oversold territory, indicating the prerequisites for a bottom formation.

Bitcoin Dominance Level ...

Soon after, the climb began. However, the price was unable to break through the 68.5% zone, which is a wider range resistance line.

Thus, there are two possible scenarios: if the price breaks the 68.5% level, then, most likely, a new growth wave will form, which will ultimately lead to a breakout of the long-term range resistance.

On the other hand, a fall below 62.5% could send the indicator to support at 52.5%.

Analysis of the dynamics since February 17 shows that the price has bounced off the 200-day moving average, which in the foreseeable future may act as resistance.

In addition, the price began to roll back from the 0.618% retracement level relative to the previous move, where a reversal may occur. So, it is possible that a bottom was formed on February 15, and BTCD will continue to rise.

Long-term dynamics

In the aforementioned tweet, the trader writes that June will be the right time to liquidate altcoin positions paired with bitcoin. Curiously, BTCD has been on the rise for at least 35 days in June 2017, 2018 and 2019. This fact, combined with our analysis, really speaks in favor of the fact that altcoins will soon begin to fall in pairs with bitcoin..

However, BTCD broke down the long-term upward support line, which may signal the end of the uptrend. Thus, we have several conflicting signals regarding the future dynamics of the indicator. Until the price breaks out of the neutral range of 62.5-68.5%, uncertainty about future dynamics will persist.

Bitcoin Dominance Level ...

So we see both bullish and bearish signals for BTCD. As long as the price is in the 62.5-68.5% range, we cannot predict the future direction of the indicator with confidence. A break above 68.5% would signal growth, while a loss of 62.5% would be negative.


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