Levels To Watch For Bitcoin Dominance
Updated
Back in 2019, I made an attempt to call the long term top in Dominance. So far, I've been correct. Here's a quick update on what's happening. The recent downtrend (yellow) has clearly been interrupted. As Bitcoin moves up here, it's important to pay attention to dominance. Altcoins have barely budged. Sometimes this is a bad sign, but in this case it could also be an intentional move by market makers. If cryptocurrencies are beginning a new bull market, it's still the early stages. This means there are still opportunities to load up on some promising cryptocurrencies at historic lows. Many will probably miss out this time (as with the last cycle), but others may even reach previous ratio all-time-highs. If a rise in Bitcoin fails to incite an all-out crypto boom, market participants may become impatient and sell, lengthening the current cycle and decimating alts further.
With dominance, there is heavy resistance overhead: The long term downtrends (Red and light blue), the 50-month Moving Average (also red), and the important 64-66% level. Right now even, dominance is in a historically important pivot level. We should see a lot of price action around here. If dominance is bearish, I'd expect people to begin loading up on altcoins with some extra Bitcoin around these levels. With futures, good traders have a lot of extra profit to throw around these days. Supports and resistances are marked on the above charts. Notice how Bitcoin continuously failed at the 9m EMA (orange) and the 50m MA (red). A sustained break above these levels would be bad for alts, and dominance can head towards 80%. This can occur regardless of what Bitcoin does.
If Bitcoin fails horribly here without sustaining at least above
12K, alts could be truly annihilated, particularly if dominance continues to move up. Alts dropping with Bitcoin rising could be a hidden warning sign. Time will tell.
This is not financial advice! This is meant for speculation, education, and entertainment only.
-Victor Cobra
With dominance, there is heavy resistance overhead: The long term downtrends (Red and light blue), the 50-month Moving Average (also red), and the important 64-66% level. Right now even, dominance is in a historically important pivot level. We should see a lot of price action around here. If dominance is bearish, I'd expect people to begin loading up on altcoins with some extra Bitcoin around these levels. With futures, good traders have a lot of extra profit to throw around these days. Supports and resistances are marked on the above charts. Notice how Bitcoin continuously failed at the 9m EMA (orange) and the 50m MA (red). A sustained break above these levels would be bad for alts, and dominance can head towards 80%. This can occur regardless of what Bitcoin does.
If Bitcoin fails horribly here without sustaining at least above
12K, alts could be truly annihilated, particularly if dominance continues to move up. Alts dropping with Bitcoin rising could be a hidden warning sign. Time will tell. This is not financial advice! This is meant for speculation, education, and entertainment only.
-Victor Cobra
Note
Hopefully we're not here. On the left is where Bitcoin topped in 2019, at almost exactly the same price level. Note
Also to see if something like this happens again with Dominance and DXY: Note
Currently seeing a pretty strong bearish divergence on the 4H as Dominance approaches the long term downtrend (red) Note
Dominance is now at the 50m MA and the 50w MA. A sustained break above could send dominance to new highs, towards 80%. If alts are bullish, now is the time for dominance to get rejected.
Note
The moment of truth! Dominance has broken the long term downtrend (red), but the more legitimate downtrend still lies just overhead (light blue). I can see a brief move above, but we should see some money begin to flow back into altcoins near 66-67% (or sooner). If not, it wouldn't look good for much of the crypto space. Note
Note
Bearish wedge has been invalidated as Dominance has marched towards the light blue trendline. Moment of truth. Should get some more altcoin buying here, near 66%. The 2/3 market share is an important psychological level. Note
If this isn't the top for dominance, there's a lot of room for upside towards 69+. From a technical standpoint, this is a good spot for alts to reclaim some dominance. Note
Looks like alts bounced slightly, but Bitcoin remains strong - testing the downtrend again now. Could see a large spike in dominance as Bitcoin nears its medium-term top. When the top is reached, perhaps that's when we see capital flowing back into other cryptocurrencies. Note
If dominance breaks out here, it can head straight up to retest the broken uptrend, forming a nasty wick above 70% Note
Dominance failed to sustain above the downtrends on the weekly timeframe, and has now fallen back towards the 65% area. I somewhat expect it to test the orange uptrend before attempting to reverse back to the upside. If those orange trendlines are broken, we can see a much more aggressive altcoin rally. Note
Never doubt my trendlines! Look at that! Same trendlines I drew months ago. If Dominance breaks below this second orange trendline, ETH will probably explode on the ratio. But still, it's important to be cautious here, Dominance should ideally NOT reclaim the long term downtrend again, if it's going to continue its decline.
Note
Dominance will also need to break down from these reclaimed monthly Moving Averages Note
And there it is! The 52 level has been hit.
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