Bitcoin (BTC) has again failed to stay above its important psychological level of $30,000, and it is currently trading at $29,500. As of this writing, the largest cryptocurrency in the market is ready to make another move lower to regain its bullish momentum. Most of the altcoins are hitting new highs and gaining dominance.
Related Reading: Bitcoin Nearing 30-Day Transaction Count Cycle High, Bullish Sign?
Bitcoin dominance hits range high
Dan Crypto, a well-known cryptocurrency analyst, recently commented On the correlation between the price of bitcoin and its dominance in the cryptocurrency market. According to Dan, when bitcoin’s dominance reaches the top of its range, it is often preceded by a move to the bottom of the range.
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To illustrate this point, Dan marked the last three periods where BTC.D hit (near) the top of the range and moved to the downside. The range marked by Dan sits around 39-49%.
During the first halving on BTC.D in the summer of 2021, the bitcoin price remained flat with a slight uptrend. However, during the second move on BTC.D from October 2021 to January 2022, there was a significant correction in bitcoin price, falling from the $60K region to the $40K region.
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The third move on BTC.D in the summer of 2022 saw the price of bitcoin drop from around $30K to $20K. We are again seeing rejection from higher levels of the Bitcoin dominance range, which could indicate a possible move below the range.
As informed of Per NewsBTC, a near-term support level for bitcoin is $29,500. This level was previously a strong resistance but has now become an essential support for bitcoin. The $28,600 level is expected to act as another key support if the cryptocurrency experiences another decline.
Red Month for BTC to Come?
Onchain Edge, a crypto analyst, recently examined Historical price performance of bitcoin during May and June over the past 10 years. The analysis revealed five red and five green months in May, indicating a 50% chance of an outcome.
Furthermore, there has only been one other year, 2013, where bitcoin had four consecutive green months, suggesting that May price action is challenging to predict. However, the analysis also looked at bitcoin’s performance in June, where trend continuation was observed in seven out of ten months.
If May was red then June was also red and if May was green then June was also green. This trend indicates that the price performance of June is highly dependent on the performance of May.
As of this writing, bitcoin has experienced a decline of over 3% over the past 24 hours. If bitcoin dominance coincides with a potentially red month in May, bulls may face a challenging ride ahead. However, it is worth noting that the tide of the crypto winter seems to be completely in order, indicating that bulls may need to be patient.
Related Reading: Here’s Why Bitcoin Price Plunged Below $29,500
Featured image from Unsplash, chart from TradingView.com
