The BTCD exceeded a line of downward resistance.
Support and long term resistance is observed at 62.5% and 71%.
The BTCD follows a short term upward parabolic support line.
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Bitcoin’s dominance rate (BTCD) has surpassed one long-term support line and aims to reach another long-term support line close to 71%.
Although the long-term trend appears bullish, a short-term rejection and correction is likely once the BTCD has reached this resistance zone.
Transition from long-term resistance
During the week of December 14-21, the BTCD crossed a downslope resistance line that had been in place since August 2019.
The BTCD continued its ascent this week and is heading towards the closest resistance zone at 71%. It had not moved above this zone since September 2019, which corresponds to the top of the descending resistance line.
The nearest support zone is at 62.5%.
Technical indicators are bullish, supporting the possibility that the upward movement will continue. This is all the more notable considering that the MACD has just passed above 0, while the RSI is in the process of passing above 70.
A passage above the 71% resistance zone could trigger an even stronger upward movement due to the absence of further resistance.
BTCD Long-Term Breakout
Cryptocurrency trader @Mesawine1 presented a graph of the BTCD, indicating that although it is currently at a high resistance level, a breakthrough above it could trigger a very strong continuation movement.
That said, he believes that the BTCD will rather decline. Although long-term indicators are bullish, as we saw above, traders should look at shorter time frames to determine the direction the BCDT will take next.
BTCD Wave Count
The BTCD day chart shows an upward support line that has been maintained since the beginning of September. Currently, the BTCD is significantly above this line, suggesting that the movement is too broad. A retracement to validate this line is therefore possible.
However, as for the week, the technical indicators are bullish, which supports the continuation of the upward movement.
The first sign of a rally that could not continue comes from the two-hour chart. The latter shows a parabolic rising support line. Once the parabola is broken, a sharp decline is likely.
This would also correspond to the above-mentioned possibility of validating the upward support line, since the fibonacci retracement levels 0.5-0.618 at 64-65% coincide with the latter.
In conclusion: the long term trend of the BCDB seems bullish, the passage above the 71% long term resistance zone is therefore very possible.
However, the short-term parabola is not viable. Therefore, a short-term corrective movement is expected before a new breakthrough attempt is made.