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Bitcoin Friday: Bitcoin broke the channel – Will dominance follow?

Bitcoin has not moved much in past couple of weeks. If a complete beginner was looking at the Bitcoin price, he might even say, that the price is completely stagnating. Since Bitcoin does not have a clear trend now and its moving mostly to the side, we have to adjust our trading to it.

Bitcoin analysis

Hodlers probably do not have many reason to smile, because the price of Bitcoin is barely moving. Long term hodlers might not care, because they should be in profit anyways. However, if someone decided to HODL long term in this year, he might be not having the best time, because it is very probable that his Bitcoin holdings are in red. This is however nothing unusual, because these phases of market cycle are normal. Since there is no clear trend for Bitcoin, long term holding might be "pushed" aside and trading can step in. What does Bitcoin 4h chart look like now?

4h chart

We have been holding this channel for quite some time. To be honest, I believed that we will break it upwards. However, I also made it clear that if we get close to downside trendline, it might get really bad. Bitcoin tried several times to break it downwards, but all the different tries were not successful. Yet, yesterday morning we got close to the downside trendline and the movement was almost immediately decided.

The trendline was broken and the channel broke down. As a support I now see the zone of 30 724 - 31 080 USD. In this moment we are testing the trendline from the downside, but I do not think we can get back to the channel.

Bitcoin 4h chart channel 4h chart of Bitcoin, Source: Author

Bitcoin dominance

We also should look at Bitcoin dominance. If you look at the chart of BTC and chart of BTC dominance, they look pretty similar, but dominance is a bit lagging. Bitcoin right now broke similar channel downwards, which might be also a chance for Bitcoin dominance. But first, I am expecting an upward movement as shown in the chart. In that case, the dotted line can be the first resistance. If Bitcoin dominance broke that resistance, the red support might possibly be the next one. On the other hand, if the resistance holds it can send us back to test the big rising channel. In case of downward breakout, altcoins can have more room to grow.

Bitcoin dominance chart The possible movements of Bitcoin dominance, Source: Author

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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