The Bitcoin dominance rate (BTCD) has broken down from a long-term support area and is in the process of validating it as resistance. Unless it successfully reclaims this level, the trend is bearish.

The BTCD has been declining since September 2019, when it reached a high of 73.02%. Since then, it has been following a descending resistance line. The fall was initially gradual but accelerated at the beginning of May 2020.

In July, the price broke down from the 62% long-term support level, something it had not done in more than a year. This area is now expected to act as resistance.

However, technical indicators have begun to show the first signs of a reversal since the MACD has formed successive higher momentum bars. In addition, both the RSI and the stochastic RSI are oversold. However, neither has generated any bullish divergence yet.

Cryptocurrency trader @Anbessa100 outlined a Bitcoin dominance chart which shows that the price has reached the 59% area. She predicts a bounce, which would mean that altcoins decline. Since the tweet, BTCD has bounced from its 59% low and reached the 61% area.

However, the chances of the rate breaking out from the 61% area look slim. The resistance is strengthened by a short-term descending resistance line and the 50-day moving average (MA).

In addition, the Stochastic RSI has just made a bearish cross.

While there was bullish divergence on the RSI, a bounce already occurred as a result, and the hidden bearish divergence that took place afterward neutralizes the previous bullish one. Therefore, we would expect BTCD to resume its downward trend.

A breakout above the descending resistance line and the 62% resistance area would invalidate this bearish possibility.

Since the beginning of 2018, BTC has likely completed a bullish impulsive five-wave pattern, which ended with the previous high in September 2019.

Since then, BTC has been correcting inside what looks like a complex W-X-Y correction (in white below). The correction should end between the 0.5 – 0.618 Fib levels of the entire upward move, found at 49.5 – 54%, respectively.

Due to the time it took for the bullish impulse to be completed, the rate could make a bottom near December 2020.

A closer look at the Y wave reveals another complex correction (in black), inside which the rate is in the final leg down. This movement should take BTCD towards the target between 49 – 54%.

To conclude, BTCD should resume its downward move towards 54%. A breakout from the 62% resistance and the descending resistance line would invalidate this possibility.

The post The Bitcoin Dominance Rate Gets Rejected at Long-Term Resistance appeared first on BeInCrypto.

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