Bitcoin Flat While Bitcoin Dominance Declines
Bitcoin Stays Range-Bound
Bitcoin remains stuck in a tight range between the 20 EMA at $46,900 and the resistance at $48,000 while Bitcoin Dominance continues to decline.
Bitcoin Dominance, which measures Bitcoin’s market capitalization as a percentage of total crypto market capitalization, has recently managed to settle below 43% and is currently trying to get below the 42% level.
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Traders’ interest in altcoins remains strong, and Ethereum has recently managed to get above the $3,500 level. It looks that some traders are frustrated with Bitcoin’s failure to get above the psychologically important $50,000 level and are moving funds into other cryptocurrencies.
This is a dangerous moment for Bitcoin bulls as Bitcoin needs to get above $50,000 to avoid a sell-off. Most likely, many traders plan to move out of Bitcoin if it gets below the low end of the $46,000 – $50,000 range, so Bitcoin may face a wave of selling in case it gets below $46,000.
Technical Analysis
Bitcoin has recently made several attempts to settle below the 20 EMA at $46,900 but failed to develop sufficient downside momentum and continued to trade in the range between the 20 EMA at the resistance at $48,000.
In case Bitcoin manages to settle below the 20 EMA, it will get to the test of the next support level which is located at $46,000. A move below the $46,000 level would be a worrisome development for the bulls and may trigger a wave of selling from traders who have put their protective stops below this level.
In this case, Bitcoin may quickly get to the test of the next support level which is located near the 50 EMA at $44,000. A move below the 50 EMA will open the way to the test of the support at $42,600.
On the upside, the nearest resistance level for Bitcoin is located at $48,000. If Bitcoin gets back above this level, it will head towards the key resistance level at $50,000. A move above $50,000 will signal that Bitcoin is ready to gain additional upside momentum.
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