Is Bitcoin heading for a Death Cross?
Bitcoin approaches “death cross” after experiencing a significant drop in recent months.
Following one of the roughest patches for Bitcoin enthusiasts, holders of the digital currency are now confronted with an alarming technical price pattern.
Known as the ‘death cross’ — the bearish indicator refers to when bitcoin’s 50-day moving average crosses its 200-day moving average — which historically has indicated the end to a bull market.
Notable death cross events in traditional markets include the notable 2008 Financial Crisis and the Wall Street Crash of 1929.
On Monday, the crypto currency dipped below $40,000 following seven straight days of losses — marking the longest losing streak since August 2019, and the poorest start to a year since 2012. The coin has since recovered but market analysts are keeping their close eye on it, hoping to see if it can hold and remain above the dreaded death cross.
Analysts warn that should the price of bitcoin falls below the barrier, an even steeper sell-off could take place. Coinglass revealed that in recent days more than $340 million of cryptocurrency was liquidated on Monday.
The greatest liquidation was on the Bitmex platform, where one trader shifted $5.96 million in crypto into fiat.
The majority of the crypto market has mostly followed bitcoin’s downward trend, with major losses in Binance Coin (BNB), Ethereum (ETH), and Solano (SOL) in the start of 2022.
Whilst the public have displayed certain levels of distress, some have been left fairly unconcerned. One analyst from big crypto film told Decrypt “People make it out to be a big, scary bearish event, but last time it happened, the market bottomed out, and shortly after pumped back up.” The analyst added “Similarly, in June ’21, the market dipped after hitting $64k, fuelled by leverage. This time around, the sell-off is probably due to the fed’s plans to reduce their balance sheet.”
Do you think Bitcoin is headed for the dreaded Death Cross? Let us know your thoughts Warriors!