Bitcoin’s ‘death cross’ begins to appear, is it worrisome?

The Death Cross is one of the technical analysis signals that gives a bad forecast about the price trend. This crossover is now starting to appear on the Bitcoin chart.

Death Crossing ability confirmed, opening more negative scenarios

Technical analysis calls the MA50 signal to cut down MA200 as a death cross. Conversely, when MA50 crosses MA200, it is a golden cross.

death cross bitcoin 1 2022 1024x848 1
Observe the death crossing signal in the 1D frame.
  • Meaningfully, this signal represents that the average closing price movement over the past 50 days has been below the 200-day average closing price movement. It proves that selling force is constantly overwhelming and dominating. Signals predict that the situation may not be positive again in the next month.
  • In addition, the current price line is moving below both MA50 and MA200. And these two moving averages become resistance for the future price line.

Crypto investor Lark Davis with over 820,000 followers also noticed this signal.

Currently MA50 and MA200 are just starting to cross and need confirmation today. However, if you change the MA to the EMA (the exponential moving average has a closer speed) then the EMA crossover is confirmed.

What do you see from death crosses that appeared in the past?

Although it is a bad signal, but looking at the past experience in the past two years, this signal also makes many people not feel very worrisome.

death cross bitcoin 1 2022 1024x848 2
Observe past Death Cross appearances.
  • In the past two years, this intersection first appeared in March 2020. But since then, the price of Bitcoin not only did not fall, but also rose to the point of inverting the MA50 which subsequently formed a golden cross and has continued to rise ever since.
  • The second time was in June 2021. After this crossover appeared, the Bitcoin price fluctuated negatively and declined. But the price of BTC still did not make a new lower low, but only returned near the old bottom and bounced up. After that, BTC also creates a new ATH.

A recent analyst view also suggests that Bitcoin could fall back below $40,000 once again before a massive rally in February 2022.

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The source: https://nguyendiep.com
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