The Bitcoin Dominance Rate (BTCD) has been declining along with a descending resistance line since January 3, 2021.
While it rebounded on May 19, it has been declining since peaking at 48.67% on May 23.
BTCD resistance line
The BTCD has been following a descending resistance line since January 3, 2021. The line triggered a rejection on March 24, leading to an accelerated downward movement.
On May 19, Bitcoin’s dominance rate settled at a low of 39.66% and rebounded considerably, leading to a high of 48.67%, four days later. However, it failed to reach the resistance line and has been moving downward ever since.
Technical indicators are showing bullish signals. The stochastic oscillator made a bullish cross (green icon) and the MACD histogram is rising. However, the signal line is still below 0 and the RSI is below 50.
Therefore, the bullish reversal is not yet confirmed.
Cryptocurrency trader @TheEuroSniper outlined a chart of BTCD, indicating that he expects a bounce towards the 50% area, before another drop to a new all-time low. As seen above, the bounce has already occurred and BTCD has been declining since May 23.
Future movement of the BTCD
The bounce after the lows on May 19 looks like a three-wave corrective structure. Also, the ensuing downward movement appears impulsive (highlighted in red).
Therefore, it is possible that, after a push to resistance at 44.9% or 46.26%, the BTCD will be rejected and continue to fall towards a new all-time low.
This would also fit the longer term count.
The relationship between Bitcoin (BTC) and the BTCD has been negative since May 19. Therefore, an increase in the price of BTC causes a decrease in BTCD (highlighted in red) and vice versa (highlighted in green).
Market capitalization of altcoins
The market capitalization of altcoins has dropped significantly in the last two weeks. Also, it created an evening star pattern, which is considered a bearish reversal pattern.
Technical indicators are mixed. The RSI has generated a hidden bullish divergence and bounced above the 50 line. Despite this, the MACD has created a lower momentum bar.
The short-term six-hour chart shows a descending resistance line from the all-time high on May 12. The line coincides with the 0.618 Fibonacci retracement resistance level.
Whether a breakout or rejection occurs will determine the direction of the long-term trend.
For the latest Bitcoin (BTC) analysis from BeInCrypto, click here.
The post Bitcoin Dominance resumes the downtrend, after a strong bounce was first seen on BeInCrypto.