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On Saturday, cryptocurrency analysts and traders discussed Bitcoin’s recent chart patterns and the infamous Death Cross pattern was a topical conversation. A number of traders believe that when bitcoin’s short-term moving average (MA) drops below the long-term MA, the crypto asset could prepare for a sell-off. Meanwhile, others are sure the technical pattern of death means the price is expected to rebound and possibly double to values higher than the previous all-time high.
The return of the infamous death cross
On June 19, a number of Twitter conversations, forum posts, and even headlines discussed the technical model called the Death Cross when it comes to the Bitcoin (BTC) chart. Bloomberg posted an article on the Death Cross on Saturday and the post featured some statements from billionaire investor Mark Cuban. The definition of a death cross from Investopedia notes that the model suggests “the potential for a massive sale.” The site definition adds:
The death cross appears on a chart when a stock’s short-term moving average drops below its long-term moving average. Typically, the most commonly used moving averages in this model are the 50 and 200 day moving averages.
However, the death cross does not necessarily mean that a bear market is due. Investopedia details that cross-fatality events have led to traditional stock market crashes over the past century, most notably in 1929, 1938, 1974 and 2008. Cross-fatalities are not unusual and data from Canterbury Investment Management indicates that the Dow Jones Industrial Average has seen 84 cross-fatalities since 1929. Popular economist and trader Alex Krüger recently discussed the situation of a death cross against the BTC / USD charts.
“The Death Cross takes place when the 50-day moving average drops below the 200-day moving average,” Krüger tweeted. “The Death Cross occurs when the 50-day moving average drops below the 200-day moving average. Journalists love to write about how a death cross could lead to a bear market. However, historical returns a week after a bitcoin death cross are POSITIVE. Relax, ”stressed Krüger.
Photo via Alex Krüger on Twitter.
The popular creator of the stock-to-flow bitcoin model, Plan B, also tweeted about the infamous Death Cross on Saturday. “Study this painting to see what happened [the] the last two times the death cross has occurred, Q4 2019 and Q1 2020, ”Plan B told its 566,000 subscribers.
Photo via Plan B on Twitter.
However, an individual named Mohit Sorout responded to Plan B’s tweet and noted that there had been a number of cross-death opportunities throughout Bitcoin’s life.
“There have been 6 Death Crosses in Bitcoin’s lifetime,” Sorout replied to Plan B. “4 resulted in huge drawbacks. The two that did not lead to a downtrend were towards the downside. end of a bear market, not after a full-fledged bull run Choose your bias wisely, “he added.
Bitcoin traders hope a double-top pattern in 2013 emerges
CNBC’s Crypto Trader creator and host Ran Neuner also wrote on the Death Cross on Saturday. “The Bitcoin shorts are closed,” Neuner said. “This is confirmation that the shorts were speculative and that they were not minors’ blankets. We have said that this will happen in anticipation of the “cross of death” which is due to cross on June 24th. Expect more FUD. I do not sell.
Photo via Sultan on Twitter.
A crypto enthusiast called Sultan also discussed the death cross situation with his supporters and said it could mean the worst is behind us. “Cross of death,” wrote Sultan. “Ironically, death crosses are often a sign that the worst is already behind us. As of DC 2019, Bitcoin had already experienced a -47% drop before the DC flashed, with a recovery of 52% after. And a drop of -64% before DC 2020, with a rapid recovery of 150%, ”he added. Another person wrote to Plan B and said:
A real cross of death is when both MAs are facing down. Good luck to anyone trading the current cross on BTC.
No one really knows what will happen, although a number of traders are confident their predictions will come true. Investor and market observer John Hostetler also touched on the Death Cross scenario on Saturday. “Only a fool could deny that this Bitcoin DeathCross looks more like a bearish cross in red than a bullish cross in green,” Hostetler said. “But I like the fall in the price of BTC this week, as if to say ‘let’s be done, then we can go up'”
“In the end, the cross changes little,” Hostetler said. “A big question remains: Has this halving cycle reached its peak? 2 weeks ago, I would have attributed a possibility of 1% to this, as I had not looked at the now dismal chart of the Bitcoin S2F multiple in a while. Since then I have increased the odds to ~ 20%. But that still leaves 80%. So I continue with the double top Bitcoin model, drawing hope from the summer of 2013, when $ BTC came close to a Death Cross: gray arrow on the chart, ”he concluded.
What do you think of the bitcoin death cross-chart pattern? Do you expect a bear market or a bull market in the future? Let us know what you think of this topic in the comments section below.
Tags in this story 2013, 6 Death Crosses, Alex Kruger, Analyst, Bitcoin Death Cross, Bitcoin Price, Bloomberg, Death Cross, Double Top, Economist, Some Death Crosses, Golden Cross, John Hostetler , Mark Cuban, Markets, Mohit Sorout, model, Plan B, Price, run neuner, S2F, Sultan
Image credits: Shutterstock, Pixabay, Wiki Commons, Sultan, Plan B, Alex Krger
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