The Bitcoin Dominance Rate (BTCD) is trading at a confluence of support levels on both the weekly and daily timeframes. If the sustained up move is to continue, one would expect the current support level to start a bounce.
Between May-Dec. In 2021, BTCD created a triple bottom pattern around the 40% long-term support area. The triple bottom is considered a bullish pattern. Therefore, eruptions are expected to occur the vast majority of the time.
Supporting this possibility was the weekly RSI, which also generated a very significant bullish divergence. The divergence trend line (green) is still intact and the RSI is sitting right at 50. So the current level on the weekly chart offers a great opportunity for a bounce.
So far, BTCD has been rejected by the 47.50% horizontal resistance area. If it manages to move above it, the next resistance stands at 52.30%.
BTC.D chart from TradingView
Future BTCD movement
Well-known futures trader @peterlbrandt posted a chart of BTCD and explained that a close above 50% would be a very strong sign of BTC moving higher.
The daily chart shows that BTCD has broken above a descending resistance line. However, after the rejection, it dropped to a confluence of support levels at 43%.
This support is provided by the 0.618 Fib retracement support level and an ascending support line.
Thus, in agreement with the weekly chart, the daily chart is showing that a rally from the current level is likely.
The two-hour chart supports this possibility, indicating that a recovery is likely. The main reason for this is that the 6-hour RSI has generated a very clear bullish divergence and it is now above 50.
If an upward movement starts, the first area of resistance would come in at 45% created by the 0.382 Fib retracement resistance level.
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