Bitcoin (BTC) has returned to its familiar sideways trading pattern after briefly dipping into the lower $25,000 range.
However, chart patterns are now hinting at the possibility of the flagship cryptocurrency breaking out of its dominance downtrend, potentially setting the stage for a rally in the decentralized finance (DeFi) sector.
Bitcoin dominance plays a pivotal role in the cryptocurrency market’s dynamics. Recently, Bitcoin dominance broke its local downtrend while maintaining its higher timeframe uptrend.
This development carries a bullish connotation, as history has shown that such a scenario often precedes an upward impulse for Bitcoin.
A notable observation by pseudonymous cryptocurrency analyst CredibleCrypto on September 12 highlights this trend.
According to the expert, five days after BTC dominance broke its local downtrend in the past, Bitcoin’s price followed suit with a significant impulsive move.
In one instance, this translated into a $7,000 surge in Bitcoin’s price. Given the current bullish structure and support at $24,800, this could suggest that another impressive price move is “just around the corner.”
Furthermore, Bitcoin appears to be on a path towards a more extended rally when examining previous market cycles. Historically, after a downtrend following a market peak, Bitcoin typically enters an accumulation phase, followed by a recovery, and ultimately, a bullish rally.
This pattern, as highlighted by CryptoYoddha, indicates a potentially positive outlook for Bitcoin’s longer-term performance.
As of the latest data on September 12, Bitcoin is trading at $25,812, reflecting a 0.39% increase over the past 24 hours. Over the week, it has recorded a modest gain of 0.55%.
However, it’s worth noting that Bitcoin still carries a 12.15% loss on its monthly chart, showcasing the volatility and fluctuations inherent in the cryptocurrency market.
