bitcoin / »class =» autolink »target =» _ blank »> Bitcoin Dominance Rate (BTCD) is potentially in the early stages of a short-term reversal that could cause a strong bullish move.
BTCD has declined since October 20, after hitting a local high of 47.72%. However, it apparently found support at the 0.5 Fib retracement level at 43.60% and rallied.
Technical indicators are at a make or break level. MACD is right at the 0 line and is close to entering negative territory. This means that the short-term trend is losing speed compared to the long-term trend and is considered a bearish sign. previous time was in August 2021, just before a drop to 39.56%.
Similarly, the RSI is currently at the 50 line and could drop below it. RSI is an indicator of momentum and crosses below 50 are often seen as a transition from an uptrend to a bearish one.
However, the Supertrend is bullish (green line), so we can consider that the daily technical indicators tend to be bullish.
Future movement
Cryptocurrency trader @Murfski outlined a BTCD chart, indicating that it looks close to a low and should follow an upward move.
As seen above, technical indicators on the daily time frame provide a very mixed outlook. However, the six-hour chart is more bullish.
BTCD is about to bounce off the support line of an ascending parallel channel. As long as the channel is intact, the short-term bullish movement is bullish.
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Furthermore, both the RSI and the MACD have generated bullish divergences. This means that as BTCD values decreased, the decrease became weaker rather than stronger. This pattern of movement often precedes trend changes.
two-hour chart shows strong resistance between 45.2% and 45.7%. This is both a horizontal and a Fibonacci resistance level.
If the BTCD manages to break through this resistance range, it is likely to be moving upward at an accelerating rate.
Has BTCD bottomed out?
long-term weekly chart shows that BTCD has rallied at the 39.50 horizontal support area. rebound was preceded by a bullish divergence in the RSI. However, the RSI has now generated hidden bearish divergence. While the former usually precedes an uptrend reversal, the latter often precedes a downtrend reversal.
It remains to be seen whether an increase in BTCD will invalidate this divergence. In any case, there is still a long way to go before the trend can be considered bullish as BTCD has yet to reach the Fibonacci retracement level of 0.382 at 52.65 as well.
However, there appears to be a short-term upward movement ahead.
For the latest Bitcoin (BTC) analysis from BeInCrypto, click here.
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