Bitcoin Dominance (BTCD) has been falling since July 30, 2021 and broke below a descending wedge pattern on August 11, 2021.
Both the daily chart and the wave counting of the BTCD look bearish, which is why Bitcoin dominance will soon fall to a new all-time low.
Bitcoin dominance daily chart analysis
The BTCD has been within an ascending wedge pattern since May 19, 2021. The BTCD consolidated in this pattern until it reached its last high of 49.24% on July 30, 2021. Since then the BTCD has been falling. Bitcoin dominance broke out of the wedge pattern on August 11, 2021 and then fell faster and faster. The BTCD is currently above the 0.618 fib retracement level (43.30%). Should the BTCD break below the level, then it could fall to the next support level at 39.60%.
The technical indicators on the daily chart look bearish. The MACD gave us a bearish reversal signal. In addition, the MACD is still in negative territory. The RSI is below the 30 line and there was a bearish crossover of the signal lines on the Stochastic Oscillator. So the trend of BTC dominance is probably bearish.
BTCD wave counting
The crypto trader @Jackis_trade published an interesting bitcoin dominance chart. He thinks we’ll see another drop to a new all-time low.
The most likely wave count fits the assumption that Bitcoin dominance will hit a new all-time low. The BTCD is probably currently in the fifth wave of a bullish impulse. The bottom of this wave is expected to be between 33.9% and 35.5%. The lower bound (33.9%) (black) is obtained by drawing an external fib retracement on the low point of the fourth wave. The upper value (orange) is obtained by projecting the length of the first wave onto the fifth wave.
Correlation with the Bitcoin price
In the past two weeks, the correlation between the BTCD and the Bitcoin price has been largely negative. This means that after the Bitcoin price went up, the BTCD went down. Should the BTC price fall in the medium term, then Bitcoin dominance could actually reach a new all-time low.
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Translated by Maximilian M.
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