Bitcoin Dominance Rate (BTCD) has followed a descending resistance line since January and was rejected by it on July 20.
BTCD may have reached a local high and will soon break out of its short-term pattern.
Descending line of resistance
Since January, BTCD has declined along with a descending resistance line. It was rejected three times (red icons), the last time on July 20.
Technical indicators on the daily time horizon are relatively neutral. MACD has lost steam and is trading exactly at the 0 line. RSI is slightly above 50 and although the Stochastic Oscillator has made a bullish crossover, it has also generated bearish divergence.
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Symmetrical triangle
short-term six-hour chart shows that BTCD is also trading within a symmetrical triangle. It is approaching the point of convergence between resistance and support. refore, a breakout / fall of the pattern is expected eventually.
Due to the daily time frame readings, a breakdown is more likely.
While the short-term RSI is neutral, the MACD is bearish and has given a bearish reversal signal.
If a failure occurs, the closest support would be at 43%, the 0.618 Fib retracement support level.
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Wave count
Cryptocurrency trader @Altstreetbet drew a BTCD chart, indicating that another wave is likely towards a new all-time low.
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most probable wave count indicates that BTCD has just completed the fourth wave of a bearish impulse (orange).
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most likely target for the bottom of the entire move is between 33.7% and 34.7%. target is created using a Fib projection on waves 1-3 (orange) and using wavelength 1 (black).
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short-term 4-hour chart shows that wave four has taken the shape of a symmetrical triangle.
BTCD has just completed sub-wave E and may fail in the near future.
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Relationship with BTC
With the exception of July 15 and 16, BTCD (orange) has had a negative relationship with BTC (blue) since July 12. This means that an increase in the price of BTC caused a drop in BTCD.
This is also visible in the correlation coefficient, which is very close to -1, indicating an almost perfect negative relationship.
If the relationship holds, it would require a continued rise in the price of BTC for BTCD to fall to its target.
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For the latest bitcoin (BTC) analysis from BeInCrypto, click here.
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