Bitcoin Dominance Hits 4-Year Low Ahead of Ethereum Merge and Cardano Vasil Hard Fork

by James · September 6, 2022

The Bitcoin dominance rate (BTCD) has fallen to its lowest value since early 2018, while Ethereum (ETH) has been increasing at an accelerated rate ahead of the merger.

With the Ethereum merger scheduled for September 15, there is considerable hype (though not all positive) surrounding the ecosystem and its new proof-of-stake protocol. This has caused ETH prices to increase considerably. ETH is currently 60% higher than its June lows.

Altcoin hype doesn’t end with the merger. Cardano (ADA), the sixth largest altcoin by market capitalization, will undergo its Vasil hard fork upgrade September 22. This is the biggest upgrade to date and will provide increased network capacity and lower cost transactions.

Table of Contents

Bitcoin Dominance (BTCD)

Bitcoin Dominance had been trending above the 40.50% horizontal support area since hitting a bottom in May 2021. After three pullbacks, it failed to make any significant breakthroughs and reached a local high of 48.45% in June 2022.

BTCD has since fallen, hitting a local low of 39.07% on September 6, breaking down from the support area in the process. Also, the weekly RSI has broken down from a rising support line (green) that had been in place since May 2021. Both of these are considered decisive signs of a bearish trend.

If the downward movement continues, the 1.61 external Fib retracement measuring the last bounce is found at 34.10%. A fall back to this level would mark a new all-time low for BTCD.

ETH/BTC

ETH/BTC has been moving upwards since reaching a low of ₿0.049 in June 2022. So far, the pair has reached a high of ₿0.084 on September 6. This is almost the highest value for the pair since early 2018, with the only high being ₿0.088 reached in December 2021.

The upward movement looks extremely bullish, as the pair has broken out of the resistance area at ₿0.079, and the weekly RSI has moved above 50 (green line). Both of these are considered signs of bullish trends.

If the rise continues, the main resistance area will be found between ₿0.11 and ₿0.12. This target area is the 1.61 external retracement level of the drop (white) and the length of waves one and three (black).

ADA

Unlike ETH, ADA has not increased much compared to the lowest level in June. On the contrary, it has consolidated inside a symmetrical triangle. At the moment, it is nearing the end of the triangle, and then a decisive move is likely to occur. The symmetrical triangle is normally considered a neutral pattern, meaning that both a breakdown and a breakout are equally possible.

Whether ADA breaks out above the $0.594 high (green line) or is rejected at the $0.423 low (red line) will likely determine the direction of the future trend.

If the ADA breaks down, the next closest support area will be found at $0.22. This target is the 1.61 external Fib retracement level when measuring the height of the triangle.

For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here

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