Bitcoin Death Cross 2022: What You Need To Know About The Deadly Signal
January 12 2022 - 1:29PM
NEWSBTC
All across crypto, fear is in the air. Not only is the market
shaken from the recent downtrend, but there’s an extra layer of
doom and gloom due to an impending “death cross” in Bitcoin. Learn
all about the ominous sounding crossover of two commonly watched
moving averages, what the signal could mean, and how Bitcoin price
has reacted in the past. The "death cross" is nigh | Source: BTCUSD
on TradingView.com Does The Bitcoin Death Cross Mean Doom And Gloom
For Crypto? Bitcoin price on daily BTCUSD charts is only days away
from completing a “death cross.” According to Investopedia, “a
death cross is a technical chart pattern indicating the potential
for a major sell-off.” It occurs when a short-term moving average
(in this case the 50-day MA) crosses below a long-term moving
average (the 200-day MA). The signal tells investors that the
asset’s growth has slowed and is showing potential of a bear trend.
Long-term price depreciation is possible. However, in Bitcoin,
things don’t always behave the way they should. Related Reading |
2022: The Year The Secular Bitcoin Bull Run Could End Across eight
total death crosses in the first ever cryptocurrency, the average
drop within a month from the cross is a mere 25% (h/t Dan via
TonyTradesBTC) – puny by crypto standards. The opposite signal,
golden crosses, also don’t always have a positive impact, either.
In fact, Bitcoin price is lower now today than it was when the last
golden cross triggered. The history of death and golden crosses in
emoji | Source: BTCUSD on TradingView.com Data Shows Whether Or Not
You Should Fear The Reaper Such crossovers, are often used to
confuse the market during consolidation phases. Ahead of the 2020
bull breakout, there were two death crosses and two golden crosses.
One notable death cross in October 2019 resulted in a 42% pump the
day prior signal. Despite the strength, price action was rejected
back down to new lows, only to golden cross, death cross, then
golden cross again. Ahead of the fabled 2016-2017 bull run, there
was also a similar fakeout – depicted in the green box. Related
Reading | The Hidden Bitcoin Trend Line That Could Save The Bull
Run Prior to the 2014-2015 bear market, however, there was a death
cross, golden cross, back into a death cross fakeout that closely
mimics the situation brewing in Bitcoin right now in the red box.
Another such example could result in a renewed bear phase. But the
data otherwise shows that the “death cross” is not a reaper you
need to fear. How will #Bitcoin . React to the “death
cross”☠️❓ — NEWSBTC (@newsbtc) January 12, 2022 Follow
@TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram
for exclusive daily market insights and technical analysis
education. Please note: Content is educational and should not
be considered investment advice. Featured image from
iStockPhoto, Charts from TradingView.com
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