Bitcoin Price Analysis: BTC Dominance Falls Below 50%

Daily Bitcoin BTC Price Forecast

Last Updated July 23rd 2021
2 Min Read
  • Bitcoin price dominance fell below 50% for the first time since 2018.
  • The MACD shows increasing bearish market momentum.
  • Bitcoin (BTC) dominance over the crypto market has slipped below 50% for the first time since 2018. This shows that BTC’s influence on the overall market has been going down, which is an indicator of altcoin season. However, this could be a negative sign too. Journalist Wu Blockchcain noted:

    ‘It is generally believed that when the market value of Bitcoin drops to around 35% or below, it may herald the end of the bull market.”

    However, we still have ways to go before Bitcoin price dominance goes down to such a level.

    Bitcoin Price Flashes Multiple Sell Signals

    Since April 14, the Bitcoin price crashed from $63,500 to $52,200 – losing more than $10,000 in the process. During this slump, BTC flashed the following sell signals:

    • The 20-day and 50-day SMAs had flipped from support to resistance.
    • The MACD shows increasing bearish market momentum.
    • The Parabolic SAR tells us that the current market sentiment is negative.

    Image: BTC/USD daily

    Bitcoin BTC Daily Chart

    On the upside, the nearest and the most robust resistance barrier lies at the 50-day SMA ($56,000). Previously, at this level, over 2 million addresses had purchased 1 million BTC coins.

    Image: IntoTheBlock

    Bitcoin BTC Volume Chart

    Gold vs Bitcoin Price

    Bitcoin vs Gold

    As per Stansberry Research, $1 invested in gold over 11.5 years results in $72m for BTC and just $1.71 in gold. This 

    Bitcoin Buyers On The Rise

    Crypto analyst William Clemente III recently said that the quantity of Bitcoin held for relatively longer-term periods is increasing. Clemente took to Twiter to note that the surge in the number of non-moving BTC is likely because of institutional investors’ unwillingness to sell.

    Glassnode Chart

    Clemente added that the growth in the amount of BTC being kept in custody or offline wallets is a bullish signal. The analyst’s tweet came at a time when Bitcoin fell nearly 15% from its all-time high of $64,863. Willy Woo, also a renowned on-chain analyst, recently mentioned that the selling pressure witnessed soon after Bitcoin hit a record high was related to the expectation that Chinese-based Bitcoin miners would suspend operations over power outages.

    Initial sell-off due to anticipation of miners going offline in China. Sell pressure was sufficient to trigger liquidation of short-term speculator positions forcing price violently down.

    However, Woo pointed out that the longer-term fundamentals of Bitcoin remain “very strong.” According to the analyst, Bitcoin is in a price-discovery phase, only rivaled by the period when the flagship crypto-asset had a four-figure price.

    Bitcoin Price Is Expected To Reach These Levels

    Bitcoin price will likely drop to the $50,000 psychological level if its current bearish trend continues.