According to historical data, Bitcoin has never seen a death cross on its weekly chart before. The ominous-sounding indicator has a bad reputation for mistaking sellers in traditional markets. Now, this pattern is just a few weeks away on the Bitcoin chart…
Bitcoin (BTC) moves to death cross on its weekly chart for the first time in its history
In the coming weeks, things could get worse for investors looking for bullish Bitcoin. Currently, Bitcoin’s 50-week simple moving average (SMA) is falling rapidly. Thus, it is preparing to break below the 200-week SMA for the first time. According to technical analysis theory, the downward cross of the two averages, often referred to as the “death cross,” means that the market is about to enter a tail point.
Bitcoin is down 75% from its November high of $69,000 ahead of this death cross. The bear market proved to be more intense than previous markets where sellers failed to hold below the 200-day SMA. Technical analysis critics note that death cross is a lagging indicator, regardless of whether it occurs on the daily or weekly charts. Also, many say it’s unreliable. Death cross is based on backward moving averages. Therefore, these criticisms are largely correct, as they reflect Bitcoin’s past performance.
Death cross has a bad reputation in traditional finance for trapping sellers on the wrong side of the market. It has done this to Bitcoin investors in the past as well. For example, the daily death cross of March 2020 was a huge price dip. That’s why seasoned traders read the death cross along with other chart factors and key indicators split on the next possible move in Bitcoin. But bankruptcies in May and November suggest that Bitcoin can make tech-independent moves.
Delphi Digital presented a pessimistic picture to BTC bulls
According to the analyst firm, Bitcoin trading sideways in the $16,500-$17,300 range following the collapse of FTX gives little hope to the bulls. Delphi’s strategists, led by Andrew Krohn, said, “We still believe that this region does not have much structural support. “In the face of further bankruptcies and uncertainty, we remain cautious while watching the $9,000-13,000 level.”
In such a case, Bitcoin miners will likely go bankrupt in the first half of next year. This will push the BTC price to a new low of $12,000 and below. The pessimistic outlook is made even more somber by the Fed’s persistent anti-stimulus bias. Still, investors are hopeful about the halving, which historically always results in a bull.
However, in the past, Bitcoin has bottomed for a new rally 15 months before each halving. The next halving will take place in March/April 2024. If history is a guide, the Bitcoin bear market may have ended at $15.473 in November and could rally as high as $63,000 ahead of the halving. But, cryptocoin.com As we have mentioned in their analysis, some analysts are pessimistic about the short-term outlook.
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