Bitcoin (BTC), one of the defining names of the crypto world, has been frequently mentioned with its complex movements in the market recently. One phenomenon in particular called the “death cross” has caught the attention of crypto investors and analysts. Famous crypto analyst Benjamin Cowen talks about the future of Bitcoin by examining this important development. your opinions shared.
The term “death cross” describes a period when Bitcoin’s moving averages cross in a historically negative manner. In short, the short-term moving average crosses the long-term moving average from bottom to top. This is considered a sign of a possible downtrend in the market and creates anxiety among investors.
Benjamin Cowen highlighted an interesting paradox, focusing specifically on the “death cross” periods in Bitcoin’s history. According to Cowen, Bitcoin historically recovers as it approaches a death cross, but then forms a lower high (new high lower than the previous high). Cowen explained that these market indicators, especially the 50-day and 200-day moving averages, are lagging patterns. According to Cowen, the delay often leads to rallies before the death cross and declines after the golden cross, creating an “unpredictable, predictable” cycle in the crypto market.
“What actually happens when you have a decline right before you hit the death cross is that it causes people to sell because they think the death cross is a bad thing and they sell, but most of the time the reason it’s a bad strategy is because golden crosses and death crosses are a bad thing.” This is because crosses are by definition lagging indicators. (…) When you see the Death Cross, when you see the Golden Cross, what tends to happen in the short term is the opposite of what you expect in the short term.”
In particular, Bitcoin’s recent rally, while seemingly promising, has resulted in lower highs, reinforcing Cowen’s analysis of the current downtrend.
This analysis by Cowen highlights the complex interplay between market indicators and investor behavior in the crypto space. As Benjamin Cowen emphasizes, understanding that a “death cross” event alone does not guarantee a decline, even based on historical data, can help investors make more informed decisions.
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