A cryptocurrency trader @eliz883 has recently tweeted a BTCD chart, claiming that the recent bounce might be the start of a strong upward surge.
Bitcoin dominance has been rising above the 40% horizontal support area since May 18, 2021. Since then, the community has shown its support for the BTCD on several occasions. On Oct 20, a rebound from this support led to a local high of 47.72 percent, but it quickly began to fall.
The BTCD dropped slightly below this support region twice in the first half of 2022 before regaining the level on January 21.
The rebound came after BTCD broke clear of a descending resistance line that had been in place since the 47.72 percent peak stated earlier. On January 24, it surged significantly, forming a huge bullish candlestick.
BTCD is now approaching the 0.5-0.618 Fib retracement resistance area, found between 43.45%-44.45%.
Technical indicators are bullish since both the RSI and MACD are increasing. The RSI is a momentum indicator with a bullish bias when it exceeds 50. It’s currently on the verge of crossing the 70-point mark. The MACD, which is made up of short and long-term moving averages, is practically positive as well.
While both are optimistic developments, it’s worth noting that the last time both indicators had these values, BTCD was nearing its 47.72 percent high, coinciding with the top of the descending resistance line.
While it appears that BTCD will be able to return to the 43.45% 44.45% range, it is still possible that it will be rejected once it enters the zone.
According to the weekly chart, the 40 percent support region is the last line of defense before a probable new all-time low. A break below it might set the stage for a precipitous drop.
Both the MACD and the RSI have produced significant bullish divergences. This indicates that the market is going to rise higher, in support of @eliz883 claims.
A clear five-wave descending pattern has already been completed when measuring from 2021 high. While it’s possible that wave five will be extended, the structure appears to be finished.
Therefore, when these measurements are combined with the daily time frame readings, an ultimate breakout from the 43.45% -44.45% range appears to be the most likely scenario.
