2020-5-16 07:15 |
The Bitcoin dominance rate (BTCD) has broken out above an important resistance area and validated it as support. As long as it is trading above it, its price movement is considered bullish.
The Bitcoin dominance rate has been increasing along with Bitcoin, causing alt/btc pairs to decrease towards their all-time lows. Cryptocurrency trader @CryptoAmsterdam tweeted an image of the Bitcoin dominance rate, which shows it resting above a significant support level.
Source : TwitterHe outlined his thoughts by stating that:
Dominance bounce and the little red turned into green! Altcoins moving down and the little green turned into red! — Don’t let them trap you with a little green. & Understand not only the chart, but also the market conditions / general market outlook
In this article, we will take a closer look at the BTC dominance chart in order to determine where it will head to next.
Support AreaAt the time of writing, the BTCD was at 68.34%. This is slightly above the 67.5% area, which has been the main area that determines the trend. During the times in which the rate has been above this area, its movement has been bullish and vice versa.
BTCD dropped below it on Jan. 7 and has struggled to break out since. On May 5, the BTCD finally broke out above it, along with the 200-day moving average (MA), which had been previously providing resistance. This is a bullish sign that suggests that the rate will move upward.
BTCD Chart By Trading View Future MovementIn the slightly longer-term, the BTCD has been following a descending resistance line since September 2019. At the time of writing, the price was in the process of validating it for the fifth time. It has previously moved above this line on May 7 but proceeded to fall right back below it.
If the BTCD rate moves above this line, it is likely to head towards the next resistance area at 70.5%. This looks like the most likely scenario. If, however, it decreases below it, it could fall all the way to 66%.
BTCD Chart By Trading ViewTo conclude, as long as the BTCD stays above the 67.5% area and the descending resistance line, it is likely to head towards 70.5%. A rejection from this line and subsequent drop below support would take it towards 66%.
The post Will the Bitcoin Dominance Rate Increase Spell Doom for Altcoins? appeared first on BeInCrypto.
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