The BTCD was rejected by a downward line of resistance.
The rate has a support at 64.3% and a resistance at 66.5%.
It is expected that it will eventually exceed its current resistance line and continue to rise.
The Trust Project is an international consortium of media organisations based on transparency standards.
On 5 November, Bitcoin’s dominance rate (BTCD) was rejected by a downward resistance line that has been in place for more than a year.
The rate is expected to decline in the short term, before finally trying to overcome its resistance.
The BTCD is rejected by a resistance
The rate of the BTCD had been rising since the beginning of September. This growth continued until it reached a downward resistance line in place since July 2019. The BTCD hit this line on November 5, but was rejected shortly afterwards, starting its current decline.
The line also coincides with the 66.5% resistance line, which corresponds to the 0.786 fibonacci level of the most recent decline. The support zone is at 64.5%.
BTCD Descending Resistance
Graphic BTCD – TradingView
Short-term movement of the BTCD
The technical indicators do not give a clear verdict on future movement. The MACD is overbought and its histogram shows weaknesses. That said, it has not yet started to decline nor has it generated any bearish divergence.
Similarly, the RSI has started to decline, falling out of the overbought zone, but it has not yet generated any bearish divergence.
Finally, the Stochastic Oscillator has not yet formed a bearish cross, although it is declining.
Knowing that the price is once again approaching the downward resistance line and that the technical indicators are not showing signs of strength, the most plausible scenario would be another rejection.
BTCD Descending Resistance Line
Graphic BTCD – TradingView
The shorter-term graph gives us a similar overview. The rate evolves between the fibonacci levels 0.5 and 0.618 of the most recent decline. This is a common area for the end of a retracement.
That said, neither the MACD nor the RSI have generated any bearish divergence, although the RSI is overbought.
Short-Term Movement
Graphic BTCD – TradingView
Wave count
Cryptocurrency trader @TheEWguy highlighted a chart of the BTCD, saying that after a brief rally, a prolonged bearish move would likely be forthcoming.
BTCD Wave Count
Source: Twitter
In this scenario, the BTC dominance rate would currently be close to the top of wave B of an A-B-C corrective structure (in red). This would complete a longer term wave 4 (in blue).
Both rejection and decline align with the rejection of the resistance line and the short-term fibonacci resistance levels.
BTCD Short-Term COunt
Graphic BTCD – TradingView
With regard to the counting of longer-term waves, the BCDT is in sub-wave 4 (in blue) of a longer-term wave 3 (in black).
Thus, when the current decline is completed, one would expect the BCDL to increase again.
SCDB Long-Term Count
Graphic BTCD – TradingView
Conclusion
Although a short-term retracement may take place, it is expected that the BCDB will eventually exceed the current downward resistance line and continue to rise.