In a few days’ time (barring a massive price swing to the upside), Bitcoin (BTC) will see what is known as a “death cross.” Menacing, I know.
For those not versed in technical analysis, a “death cross” is when a short-term moving average, often the 50-day as it is indicative of short-term trends, crosses below a long-term moving average, often the 200-day. As Investopedia accurately defines the term,
“The death cross is a technical chart pattern indicating the potential for a major selloff.”As the above analyst pointed out, after the three previous death crosses on the daily channel, Bitcoin saw a downtrending market in the months that followed. Case in point, the last death cross, which was observed in early-2018, marked the commencement of a long-term price correction to the harrowing $3,000 bottom.
While the previous death cross seen in 2018 sent Bitcoin investors capitulating, it is important to note that this technical formation is not a definite sign of “doom”, so to speak. Look to the chart below as a case in point.
What I’m showing you above is mid-2015 to early-2016, the period after Bitcoin had bottomed and had begun to enter into a fresh long-term bull trend. As you can see, the white line, the 50-day moving average, crossed bearishly in September 2015 as Bitcoin consolidated after a price drop. What’s interesting in this case is that BTC didn’t fall further, instead, it actually started to creep higher. The same could take place here, albeit the odds of a similar scenario playing out are not 100%, that’s for sure.
Regardless, there are signs that it isn’t game over for BTC, no matter what some may say.
A popular indicator used by cryptocurrency traders has just printed a massive “buy” signal for Bitcoin. As pointed out by analyst Moe Mentum, the TD (Tom Demark) Sequential
, a time-based indicator used to signal trends, recently printed a massive “buy nine” for Bitcoin’s one-week chart. The last time BTC saw a buy nine on its weekly chart in July of 2018, a two-week surge of $3,000 followed soon thereafter.Photo by Cherry Laithang on Unsplash