BTC dominance at an inflection point
Hello all. Hope your new year was a happy and safe one. Bitcoin sure has had a good new year. On an absolute tear as of late. I wanted to share some trends I'm seeing play out.
1. As you know triangle and wedge patterns can take a while to form and not be truly apparent until we get close to a breakout. It appears that we are seeing an ascending triangle forming on the weekly. We are at a major point right now. A breakout at the bottom over the next few weeks would put us in Alt season territory with Dom. at 60. A top breakout would delay any hope of an alt season for a while. Every aspect of Bitcoin right now is overextended. The only indicator that's not is MACD but it always lags so no surprise there. I'm also seeing major bearish divergences on Bitcoin's price. Bull markets can be irrational so who knows when it will break. When it does though it might be hard and fast and I wouldn't be surprised to see it at 20-30%. Could a retest of prev. ATH be in play? Who knows.
2. Ascending triangles are known to be continuation patterns. Although a triangle pattern can break in either direction BTC.D seems to be forming a huge bear flag.
3. RSI is overbought and at a point of historical resistance. As you can see it has never reached much higher than where it is currently
4. KDJ is forming a bearish divergence
5. On the daily chart not pictured there is a bearish divergence on RSI as well. It's also an almost exact copy of the fractal from Nov. 2017 before the violent drop in Dominance.
I'm also going to link in a chart of the OTHERS.D (Alt. dominance). It's forming an ascending triangle as well but moving in the opposite direction with a breakout possibly in late 2022 early 2023. If you subscribe to the lengthened cycle camp then this lines up. Also what happens when OTHERS.D breaks out to the upside? Will we be in territory where BTC dominance won't matter anymore? I don't see Bitcoin ever losing relevance but it may lose it's dominance one day, fulfilling part of it's purpose of starting a new era of decentralization. Then when the market is mature BTC dominance won't matter as much. Only time will tell...
1. As you know triangle and wedge patterns can take a while to form and not be truly apparent until we get close to a breakout. It appears that we are seeing an ascending triangle forming on the weekly. We are at a major point right now. A breakout at the bottom over the next few weeks would put us in Alt season territory with Dom. at 60. A top breakout would delay any hope of an alt season for a while. Every aspect of Bitcoin right now is overextended. The only indicator that's not is MACD but it always lags so no surprise there. I'm also seeing major bearish divergences on Bitcoin's price. Bull markets can be irrational so who knows when it will break. When it does though it might be hard and fast and I wouldn't be surprised to see it at 20-30%. Could a retest of prev. ATH be in play? Who knows.
2. Ascending triangles are known to be continuation patterns. Although a triangle pattern can break in either direction BTC.D seems to be forming a huge bear flag.
3. RSI is overbought and at a point of historical resistance. As you can see it has never reached much higher than where it is currently
4. KDJ is forming a bearish divergence
5. On the daily chart not pictured there is a bearish divergence on RSI as well. It's also an almost exact copy of the fractal from Nov. 2017 before the violent drop in Dominance.
I'm also going to link in a chart of the OTHERS.D (Alt. dominance). It's forming an ascending triangle as well but moving in the opposite direction with a breakout possibly in late 2022 early 2023. If you subscribe to the lengthened cycle camp then this lines up. Also what happens when OTHERS.D breaks out to the upside? Will we be in territory where BTC dominance won't matter anymore? I don't see Bitcoin ever losing relevance but it may lose it's dominance one day, fulfilling part of it's purpose of starting a new era of decentralization. Then when the market is mature BTC dominance won't matter as much. Only time will tell...
