According to the new technical data in the chart Bitcoin (BTC) It gave a rare signal that historically caused a 50% drop in price.
As reported by Koinfinans.com, popular account Nunya Bizniz, who shared a tweet on April 25, stated that she has seen a warning signal from the two leading moving averages in the BTC/USD pair.
According to analyst bitcoin price It may take a long time, such as 6 months, to recover from this decline. Bitcoin’s 20-week and 50-week moving averages (WMAs) have been bearish only three times so far.
While this decline may seem rather harmless at first glance, it has lost more than 50% of the BTC/USD pair after it took place in late 2014 and late 2018.
Both have hit similar points in Bitcoin’s four-year halving cycles and, while a little ahead of their time, it’s been almost a long time since the 2018 crash that bottomed out at $3,100.
Experienced analyst and macro investor Tuur Demeester shared, “I think this chart draws valid parallels.”
“If Bitcoin does not capitulate to these signals this time and can hold the $35,000 level, it would be an incredible bullish sign. But my baseline scenario is that there will be a bearish dip and a 3-6 month price rebound, given how weak global markets look.”
In mid-March, the 20-WMA dropped below the 50-WMA, data from Cointelegraph Markets Pro and TradingView in what is commonly known as the “death cross” among chartists. Despite its name, the phenomenon has not always resulted in significant losses.
Strong Dollar Raises Suspicions
Consensus continues to form over a prolonged period of price weakness for Bitcoin, which should be in line with a correction in heavily correlated global stock markets.
US dollarThe strength of the Federal Reserve against inflation-fighting maneuvers is also in focus as a preemptive warning sign for those predicting a shock after two years of liquidity pressure.
Analyst Dylan LeClair commented, “DXY is approaching decades highs,” in a new thread of tweets on the subject on April 24.
“The USD continues to strengthen against foreign fiat currencies, tightening financial conditions. By design, a breaking point is approaching for a historically overly leveraged economic system.”
For LeClair, this represents a very short-term pain, long-term gain situation for BTC holders. The recovery will come via a “turnaround” of the Fed, which will not be able to sustain inflation-steering monetary tightening for long.
“The Fed will eventually have to return to easing, as any period of sustained monetary tightening will be followed by a deep global recession.”
Supply chain problems from the war in Ukraine and news of the lockdown in China, that level of global indebtedness = sovereign defaults. BTC will fly.”
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.