Carnage according to China News, BTC dominance rises 8 percent

After weeks of sideways phases, Bitcoin left its range between USD 59,000 and USD 53,000 and fell back to the striking low of USD 30,000 this Monday. Although the BTC price recovered by almost 18 percent in the last two hours of trading, fear has returned to the market. The BTC dominance can meanwhile recover significantly and increase by 8 percentage points.

Bitcoin (BTC): Bitcoin course without a clear direction

BTC course: 35,198 USD (Previous week: 49,473 USD)

Resistance / goals: $ 38,743, $ 40,240, $ 41,967, $ 43,030, $ 44,878, $ 47,070, $ 48,222, $ 51,307 / $ 50,305, $ 53,005, $ 54,077, $ 56,867, $ 58,386, $ 59,527, $ 61,122, $ 61,771, $ 64,896

Supports: $ 36,097, $ 33,770, $ 31,749, $ 30,000, $ 29,748, $ 28,716, $ 27,563, $ 25,752, $ 23,887, $ 22,222, $ 21,892, $ 19,884,

Price analysis based on the value pair BTC / USD on Coinbase

As mentioned in the previous week, the breakout of the trading range between USD 59,000 and USD 53,000 caused a directional decision. The bulls initially failed to regain the key USD 59,527 mark. As a result, the Bitcoin price fell 37 percent southwards in the last seven trading days. Bitcoin slipped as low as USD 36,097 in the last hours of trading before a countermovement set in. If the bull camp does not manage to stabilize the Bitcoin price above 40,000 USD and is already turning south again here, this would be a clear sign of weakness. The abandonment of the EMA200 (blue) at USD 41,967 and the MA200 (green) at USD 39,763 would significantly cloud the chart. Since the classic stock market also corrects significantly to the south, price targets in the range of USD 30,000 can currently no longer be ruled out.

Bullish scenario (Bitcoin price)

The last week of trading was marked by significant taxes. Bitcoin was unable to defend the psychological mark of USD 50,000 and subsequently also slipped below the low of USD 47,070. As a result, the price collapsed to around USD 41,967. The EMA200 (blue) was able to prevent another crash for several trading days. In the last 12 hours of trading, news about a Bitcoin trading ban by Chinese banks pushed the price further south. Bitcoin lost another 15 percent of its value within a few hours, marking a new 3-month low at USD 30,095.

Although the price can recover somewhat at the moment, the correction could not be over until the bulls manage to recapture USD 41,967. If Bitcoin can save itself back above the EMA200 (blue) and also overcome the resistance at USD 43,030, a recovery back towards USD 44,878 would be possible. Above this level, the BTC price could even jump back towards USD 47,070. For this week, due to the very strong selling pressure, a sustained increase back above USD 50,000 is not expected. The price could reach a maximum of USD 53,005 in the short term before the bears take control again. This has put the attack back towards the all-time high on hold for the time being. Only when Bitcoin can sustainably move back above USD 53,005 would the worst for the bulls be over.

Bearish scenario (Bitcoin price)

The bears have done a great job this week, mercilessly selling off the market for the last 12 hours of trading. In the low, Bitcoin crashed to a new history low at USD 30,000, completing the January 2021 test of the important support. After the end of the bloody sell-off, the BTC price shot significantly north again in the last few minutes of trading and is currently trading at USD 35,921. Should the bears manage to keep the rate of the crypto reserve currency below 40,000 USD in the coming trading days, and also fall below 33,770 USD again, a renewed consistency test of the range around 30,000 USD could take place. Below this psychological level, Bitcoin is likely to correct further and head for the trend low at USD 28,716.

If this strong support mark is also abandoned, the correction will expand again and USD 27,563 or even USD 25,752 could be started. If the traditional financial market also comes under greater pressure, and this support does not hold either, the focus of investors is on USD 23,887. It cannot currently be ruled out that the Bitcoin rate will even test USD 22,222 in the coming trading weeks. In the range between USD 22,222 and USD 21,892, however, massive resistance from the bulls can be expected. At most, the BTC rate could even collapse in the short term to the breakout level at USD 19,884. Other institutional investors will have placed their buy orders here. Since the RSI indicator is now in the 30 range at all time levels, the risk of another sell-off should be averted, at least for the time being. Brave investors can try their first long positions. However, the stop loss should be pulled into plus as soon as possible.

Bitcoin dominance: BTC dominance with a small sign of life

Bitcoin dominance based on values ​​of Cryptocap shown

After Bitcoin dominance broke the psychological 50 percent mark, the downward trend picked up again. As a result, the dominance of the crypto reserve currency fell by a further 10 percentage points to 39.73 percent. This means that the dominance level is only around 6 percent away from its low in January 2018. Today, Tuesday, the first investors seem to be increasingly weighting Bitcoin higher, which is why the market dominance can recover somewhat. At the time of this analysis, BTC dominance is trading at 43.51 percent.

BTC Dominance: Bullish Scenario

The BTC dominance has been under a significant sales breach since the 50 percent market dominance was broken. Only in the area of ​​the 40 percent mark can the BTC dominance stabilize in the last few days of trading and jump to the north by more than 8 percent on Wednesday, May 19. If the Bitcoin dominance manages to develop a bottom, the price should initially rise to 43.26 percent. If the Bitcoin dominance can overcome this initial resistance, the area of ​​44.27 percent immediately comes into focus. Here is the EMA20 (red) and an intermediate low from the previous week. Only when the dominance dynamically breaks through this brand is a breakthrough of up to 45.71 percent likely.

Here the supertrend runs in the daily chart. If the situation on the crypto market worsens and the correction in the overall market picks up speed, investors are likely to increasingly seek protection in the crypto reserve currency and increasingly ignore altcoins. An increase back to the orange range between 49.40 percent and 50.22 percent should be the result. In perspective, an increase to the upper Bollinger Band in the area of ​​strong resistance at 52.19 percent is conceivable. The maximum dominance could run up to 53.16 percent. From the current perspective, nothing more can be expected for the time being. In this area, the tide is likely to turn again and the BTC dominance will slide back below 50 percent.

BTC Dominance: Bearish Scenario

Bitcoin’s market power has recovered more clearly in the last hours of trading and is up around 7 percent. As long as the BTC dominance does not stabilize sustainably above the psychological 50 percent mark, a relapse to 40 percent or below cannot be ruled out. Should Bitcoin’s dominance continue to tend to be weak in the coming weeks, a correction expansion into the green support zone between 39.10 percent and 37.67 percent is to be expected. The 37.67 percent is particularly important.

This price level already marked a central low in January 2018. Therefore, at 37.67 percent, a recovery movement is to be expected. If this support is also given up in the long term, the BTC dominance could even target the psychological mark of 30 percent in the medium term. But it is still too early to make such a prognosis. For the coming trading days, it is important to carefully observe whether and how quickly the Bitcoin dominance can recover towards 50 percent and above.

Disclaimer: The price estimates presented on this page do not constitute buy or sell recommendations. They are only an assessment of the analyst.

The chart images were created using TradingView created.

USD / EUR exchange rate at the time of going to press: 0.84 euros.