фото показано с : beincrypto.com

The Bitcoin dominance rate has been steadily increasing since reaching a low of 36% in January 2018. It appears to be close to reaching a peak, and the 76% area represents an absolute upper limit.

On Sept 5, BTC dominance reached a high of 73.4% but has been decreasing since. Comparisons to previous decreases have led many to call for the beginning of another “altseason” over the past few months. However, the altcoin market stagnation has put these calls on pause.

Cryptocurrency analyst and trader CryptoWolf outlined a bearish chart for the Bitcoin dominance rate. In it, the price has completed a head and shoulders pattern, which is considered a bearish reversal pattern.

The tweet gives a target of 63% for the possible ensuing breakdown.

The Bitcoin dominance rate has created a head and shoulders pattern over the past six months.

The left shoulder was created in July near 69%, the head was completed in September near 73%, while the right shoulder in November topped out around 71%. While the pattern is not completely textbook, it is regular enough to draw an ascending neckline.

A breakdown of the entire height of the pattern would bring Bitcoin’s dominance back to 63%.

However, there are reasons to believe the price will not actually break down from this head-and-shoulders pattern. Since the end of October, the price has created a double bottom at 68%. This was combined with a bullish divergence in both the RSI and MACD.

Therefore, instead of breaking down from the head-and-shoulders pattern, it seems more likely that it will continue to increase at the rate predicted by the ascending neckline.

When looking at the rate of increase since 2018, there is an interesting development. Every time the price makes a higher-low, its rate of increase intensifies. Currently, the dominance rate is following its third ascending support line, which is naturally the steepest until now.

This is unsustainable and a characteristic of the end of a cycle. This is further solidified by the fact that the weekly RSI has reached oversold levels, which it has never done so previously. It has also generated a slight bearish divergence.

If the price continues to increase as a result of the double bottom, the 76% resistance area is likely to act as the absolute top.

To conclude, we believe the BTC dominance rate is close to reaching its peak. Additionally, the price will likely not break down from the head-and-shoulders pattern, rather it should increase in the short-term before eventually seeing any downside.

Images courtesy of Twitter, TradingView.

The post Bitcoin Dominance Close to Reaching a Top, According to Analyst appeared first on BeInCrypto.

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