BTC dominance has returned to a steady downtrend on the 4-hour timeframe, with targets down to 57.17%.
BUT there are important signals for a bounce and growth, the question is where the low will be set. And, of course, what the maximum growth will be.
The current decline in dominance has been ongoing since June 22 and on the chart is working out two correction patterns - 'Bearish Wedge' with a target around 55.7% and 'Bearish Flag' with targets around 55.7% and 57.85%. We pointed them out on August 7.
Guidelines on important levels, which have been with us since winter regarding dominance, - let’s remind, are as follows:
- everything above 61.69% is likely very bad for altcoins (positive only if there is active growth across the entire market with BTC leading),
- consolidation below 59.88% - once again (after the growth in November) we pull out the champagne,
- a consolidation below 58.08% - we open/pour.
Currently, the low in the correction is 59.12%. But it seems that although there is a breakout at 59.88% - to open and pour champagne - we will have to wait. There is a possibility that even the nearest targets of the steady downtrend in dominance on the 4-hour timeframe - will not be worked out. However, as long as it is below the potential breakdown level of 59.82% - the targets for decline still hold.
As seen in the screenshot, in recent days, dominance has broken the trend resistance since August 3 and is now retesting the breakout. These are signs of recovery. Meanwhile, regarding the potential low marks:
- already three marks + a fourth additional one on the daily timeframe,
- two marks on the 2-day timeframe,
- one mark on the 3-day timeframe,
- one mark on the weekly timeframe (the first since September 2022❗️).
The combination looks like this, that it will not just be a local bounce. If a scenario of strong growth is brewing - then:
- EITHER we are on the verge of a new bullish run (which would be logical given the fourth-year cycle season),
- EITHER the market is again facing bleak times of general correction, where BTC will act as a refuge for liquidity.
Although statistically, in such cases, the second often occurs - there are decent chances to get the first one now.
So far, the maximum we expect from the bounce of dominance is the horizontal level of 61.69%. A larger bounce is currently only possible with pronounced weakness in #ETH.
