Analyst’s prediction about Bitcoin approaching the technical chart known as the “death cross,” which indicates a dramatic drop to $18,000.
What Does Bitcoin’s “Death Cross” Means?
Bitcoin’s price has been a true roller coaster for several weeks, with quick increases, dizzying crashes, and surprising turns. The cryptocurrency’s price was ready to form the “death cross,” a graph that could predict a significant decline in its value.
The foreboding technical indication known as the ‘death cross’ is looming, implying that the Bitcoin bull market may be coming to an end. The bearish indication has been noted by cryptocurrency trader ‘Rekt Capital,’ who claims that “whenever a Death Cross occurs, BTC sees deeper downward.”
#BTC is on the cusp of a potential Death Cross
Whenever a Death Cross occurs, BTC experiences deeper downside
How likely is it that this Death Cross occurs for $BTC?
And if it does – what should we potentially expect?
Here’s a thread with my thoughts about the Death Cross:
— Rekt Capital (@rektcapital) June 1, 2021
A death cross is a technical chart pattern that indicates the possibility of a large sell-off or an intensifying slump. When an asset’s short-term moving average falls below its long-term moving average, it appears on a chart. The 50-day and 200-day moving averages are two of the most commonly used moving averages in this pattern.
Confirmation Of A Bearish Trend
According to the analyst, there is a significant lag before a death cross happens, and much of the selling might already have occurred.
Bitcoin has already dropped 43.5 % of its all-time high of $65K to current levels, which is not unusual for correction magnitude. The gloomy technical signal, on the other hand, could indicate that there will be a lot more agony ahead.
The expert made a parallel between the 2017 bull market and the duration of time it took for the death cross to occur:
“When BTC was at its maximum in 2017, the Death Cross took 107 days to occur. That equates to 3.5 months. And during those three and a half months… Bitcoin has lost -70 percent from its top of $20,000,”
He went on to say that after the death of the cross in April 2018, Bitcoin saw a further -65% drop to the downside, falling to $3,200 in December of the same year.
The death cross appeared 149 days after the peak of the mini-rally in mid-2019. BTC prices had dropped by 53% by this point, but a further 55% drop occurred following the cross.
Is Bitcoin’s History Repeating Itself?
The analysts attempted to forecast when the death cross would occur:
“If history repeats itself, BTC’s Death Cross might occur between late July and early September 2021,”
Using previous cycle data, he predicted that a 55 percent drop from a death cross emerging at roughly the same levels as the peak would send prices plunging to around $18,000.
He said that a drop of this magnitude would bring prices to the 200-week moving average, which has historically served as a strong support and long-term buy zone.
“Which corresponds to the 200-Week EMA, which tends to present amazing opportunities with outsized ROI for BTC investors,” says the author.