BTC Dominance retesting critical 40% level
This idea is Short (short term), Long (long term).
There is heated debate right now on whether BTC has yet reached its top in this cycle.
BTC is range-bound against USD (detail not shown) between $46K and $51K. A break out will probably lead to retest of ATH and possibly new price discovery. A break down would then leave the £40K level as the last support for the current bull trend. A failure would invalidate the trend and signal a high timeframe bear market.
At the same time we see that BTC dominance vs alts (chart shown) is retesting 40% for the third time in 2021 (red line). This level was where BTC dominance started to recover back in May 2018 that preceded the 2019 bull run. The BTCD ATL is at 35%.
My hypothesis here, only one POSSIBLE scenario, is that BTC continues to fall against USD to retest the $40K level. During this period BTC falls harder than Alts so the BTCD also drops to retest its ATL around the 35% level.
Following this capitulation, the convergence of these historically strong support levels will trigger a general cryptocurrency market recovery where BTC will lead. BTCD will recover back to the the resistance at 55% and price against USD will break through ATH and into price discovery (shown as dark green arrows).
As a side note, I don't think we will ever see BTCD get back into the 70% levels which was tested as a double top between Aug '19 and Dec '20.
Let me know what you think about this idea in the comments below.
There is heated debate right now on whether BTC has yet reached its top in this cycle.
BTC is range-bound against USD (detail not shown) between $46K and $51K. A break out will probably lead to retest of ATH and possibly new price discovery. A break down would then leave the £40K level as the last support for the current bull trend. A failure would invalidate the trend and signal a high timeframe bear market.
At the same time we see that BTC dominance vs alts (chart shown) is retesting 40% for the third time in 2021 (red line). This level was where BTC dominance started to recover back in May 2018 that preceded the 2019 bull run. The BTCD ATL is at 35%.
My hypothesis here, only one POSSIBLE scenario, is that BTC continues to fall against USD to retest the $40K level. During this period BTC falls harder than Alts so the BTCD also drops to retest its ATL around the 35% level.
Following this capitulation, the convergence of these historically strong support levels will trigger a general cryptocurrency market recovery where BTC will lead. BTCD will recover back to the the resistance at 55% and price against USD will break through ATH and into price discovery (shown as dark green arrows).
As a side note, I don't think we will ever see BTCD get back into the 70% levels which was tested as a double top between Aug '19 and Dec '20.
Let me know what you think about this idea in the comments below.