Bitcoin dominance (BTCD) is in the process of breaking above the long-term descending resistance line, which could be the catalyst for a significant upward movement.
Triple bottom pattern
The weekly chart shows that Bitcoin Dominance has rallied 3x (green icon) from the 40% long term support area. BTCD has not closed below this level since January 2018. The bounces have created a triple bottom.
The triple bottom is considered a bullish pattern, which means it usually leads to upward movements in most cases. The fact that it took place inside an important support area further enhances its significance.
If an uptrend occurs after that, the next resistance will be at 52.30%. This is the 0.382 Fib retracement resistance.
Trader @eygnthebender tweeted a chart of Bitcoin Dominance, saying that another rally towards 44% is expected.
The daily timeframe shows that BTCD has been falling below the descending resistance line since Oct. 21. The line has been in existence for 193 days so far. Currently, BTCD is in the process of breaking above it.
Technical indicators support the possibility of a breakout. The RSI has broken out above its downtrend line and is above the 50 level. The MACD has created a bullish cross (green symbol) and is close to cutting into the positive zone. The last time such a bull cross occurred, a 12% upside move followed.
Therefore, if the breakout is confirmed, an upward movement to 48% is possible, surpassing the target outlined in the tweet.
Relationship with BTC
Over the past two weeks, the relationship between BTC (green) and BTCD (orange) has been mostly positive. This means that the increase of one has also increased the other.
Therefore, BTC needs to rise for Bitcoin Dominance to rise as suggested.
Finally, USDT dominance seems to be creating a triple top, which is combined with a bearish divergence in the RSI (green line).
This is a bearish pattern suggesting a possible downtrend.
The relationship of BTCD to BTC and the dominance of USDT suggests that the price of BTC will increase in the near-term.