In a recent analysis by Charting Guy, an analyst on X, Bitcoin Dominance ($BTC.D) is on the brink of a significant technical event. The monthly Relative Strength Index (RSI) is poised to cross bearish for the first time since January 2021. This development could signal the beginning of an altcoin season, as BTC.D contends with long-term trends and critical resistance levels.
The chart reveals a persistent long-term downtrend in Bitcoin Dominance, commencing from its peak around 2017. This trend is marked by a descending blue trendline, illustrating BTC.D’s consistent pattern of lower highs and lower lows.
Despite recent upward movements, BTC.D has yet to break free from this overarching downtrend. From a low near 39.66%, BTC.D has been in a clear uptrend, steadily climbing towards the descending trendline. Currently hovering around 53.95%, this level is a pivotal point in determining whether BTC.D will break through or be repelled once more. The green ascending line on the chart highlights this recent upward momentum.
Fibonacci retracement levels provide crucial insights into potential support and resistance areas. The 0.236 level (45.17%) served as a significant support level following the drop from the 2021 highs, while the 0.382 level (49.59%) acted as resistance during the initial stages of the recent uptrend. The 0.5 level (53.48%) is currently acting as a resistance level, close to the present BTC.D level of 53.95%. Levels above 0.618 (57.62%) indicate future resistance if BTC.D continues its rise.
The RSI is a critical indicator for assessing market conditions, providing insights into overbought or oversold states. Displayed at the bottom of the chart along with a yellow moving average line, the RSI recently crossed above this moving average, typically a bullish signal. However, Charting Guy’s analysis points to an impending bearish cross, which could signal a shift in market sentiment.
Ultimately, with the monthly RSI poised to cross bearish, market participants should closely monitor BTC.D’s interaction with key resistance levels and trendlines. The outcomes will shape the market dynamics, potentially ushering in a new phase of altcoin season or reinforcing Bitcoin’s dominance.
