Technical Indicators Suggest Bitcoin Dominance ‘Retesting Breakout Level’ According to Benjamin Cowen
Benjamin Cowen, a well-known crypto analyst, commented today on Bitcoin’s market dominance, noting that it appears to have conducted a “clean backtest” at the 50% level, which he identifies as the breakout point.
Additionally, Cowen pointed out that Bitcoin has bounced off its “bull market support band.” Here’s what those technical terms mean and why they are significant in this context:
- Breakout Point at 50% Dominance: In technical analysis, a breakout point refers to a specific price or, in this case, market dominance level that an asset has struggled to surpass. In Bitcoin’s context, the 50% market dominance level appears to be this critical breakout point. After breaking past this level, Bitcoin retested it, meaning its market dominance dipped back to around 50% but did not go below it. This “backtest” is considered a bullish indicator because it suggests that the 50% mark has transitioned from being a resistance level to a new support level. It provides added confidence that Bitcoin will maintain, if not extend, its market dominance going forward.
- Bull Market Support Band: This refers to a calculated range of market dominance levels that serve as a support for Bitcoin during its bullish trends. When Bitcoin’s market dominance falls to this band and subsequently bounces off of it, it typically signals the asset’s strong standing in a bull market. The “bounce off” of this band would indicate that Bitcoin’s upward trend in market dominance is more likely to continue, thereby reinforcing its position relative to other cryptocurrencies.
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Show more +Given Bitcoin’s market dominance is at around 50% and has successfully backtested this breakout point, along with a bounce off the bull market support band, Benjamin Cowen’s analysis suggests a positive outlook for Bitcoin’s relative strength in the cryptocurrency market.
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