Bitcoin Price Forms Death Cross, Worries Traders

The cryptocurrency market has been shaken recently by the formation of one of the most feared patterns by technical analysts: the “death cross.” This pattern occurs when the short-term moving average, usually 50 periods, crosses below the long-term moving average, often 200 periods. The pattern indicates a possible prolonged downtrend in the price of Bitcoin.

This phenomenon, visible on Bitcoin’s daily candle chart, has caused concern among traders. The “death cross” is traditionally seen as a sign that sellers are gaining strength. As such, the market could face a phase of devaluation. Historically, this pattern has preceded significant declines, which increases pessimism among investors.

However, it is crucial to note that the “death cross” is not an infallible indicator. Although it has preceded moments of sharp decline in the past, there are records of occasions when the price of Bitcoin rose even after the formation of this pattern.

Therefore, analysts recommend combining this indicator with others, in addition to fundamental analysis, to obtain a more complete and accurate view of the market.

Bitcoin Price Analysis

Augustine Fan, head of analysis at SOFA.org, shared his concerns about the current bearish trend.

“Cryptocurrency prices are likely to remain range-bound with a bias to the weak side,” Fan commented in a recent press statement.

He bases this forecast on technical analysis models that point to a possible continuation of the devaluation in the short term.

Another factor that may be contributing to Bitcoin’s negative performance is the escalation of tension in the Middle East. With Iran’s recent threat to attack Israel, investors are tending to migrate to assets considered safer, such as gold and Treasury bonds, to the detriment of more volatile markets, such as stocks and cryptocurrencies.

Despite the current situation, the medium and long-term outlook for Bitcoin is still largely bullish. Major investors and analysts, such as Grayscale, project that the price of BTC could reach new highs before 2025.

However, the coming days will be crucial in determining whether the cryptocurrency market will be able to reverse the current bearish trend or whether it will continue to fall under the weight of the “death cross”.

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