The Bitcoin Dominance Rate (BTCD) has been trading inside a small range since the beginning of February.
A breakdown from this range is expected since BTCD has shown considerable weakness. Both technical indicators and the wave count are in alignment with the drop.
BTCD Continues Consolidating
BTCD has been decreasing since Jan. 3, when it reached a high of 73.63%. On Feb. 23, it reached a low of 59.67%. Since then, it has been consolidating in a range of roughly 4%.
Technical indicators in the daily time-frame are relatively bearish. Both the MACD & RSI are decreasing. The former has made a bearish reversal pattern, while the latter has dropped below 50.
While the Stochastic oscillator has made a bullish cross, it is not showing any strength.
Therefore, the most likely scenario would be a decrease if the token’s price moves downwards. The token would find the next support area at 57.5%.
Potential BTCD Wave Count
Cryptocurrency trader @Davthewave outlined in a chart, stating that a breakdown is likely due to a head and shoulders pattern. He gave a potential target of 54%.
Besides the head and shoulders, the movement since the beginning of February looks like a symmetrical triangle. This could potentially be a 4th wave triangle since BTCD may be in wave four of a bearish impulse.
If so, a potential target for the bottom of the move would be found at 55%, aligning with that in the tweet. A close below the support line of the triangle would confirm the breakdown.
The next most likely target would be found at 50%.
Conclusion
To conclude, BTCD is expected to end its consolidation by breaking down from the current pattern. If so, the most likely target for the low would be found near 55%.
