Ever heard of the Death Cross in terms of technical analysis?
It sounds ominous, but it really isn't.
Bitcoin is about to experience a Death Cross, which is where the 50 day moving average crosses the 200 day moving average to the down side.
(Source: https://www.coindesk.com/why-bitcoins-death-cross-may-become-a-bear-trap/)
Before you get too caught up in the name though, it really just means that a shorter term moving average has crossed a longer term moving average to the downside.
Which sometimes could signal lower lows, in terms of price, are yet to come.
However, is the Death Cross really that great of a technical indicator?
In one word, no.
In fact, I find the death cross to be more of a contrarian indicator as opposed to a leading one.
This was something I noticed back in my stock trading days as all kinds of headlines would come out about how a certain stock just had a death cross and was now doomed to go much lower.
Except right about that time as all those headlines were coming out, the price would tend to reverse and that would end up being the low.
Will something similar happen with bitcoin?
Well to make some educated guesses, lets take a look at a couple other times when a death cross has happened.
In the chart seen below, there have been 3 death crosses from 2014-215:
(Source: https://www.coindesk.com/why-bitcoins-death-cross-may-become-a-bear-trap/)
In all 3 of them the price made at least a short term bottom right about the same time the death cross was confirmed.
Then in 2 of the 3 scenarios, it turned out to be a longer term bottom and prices trended significantly higher from there.
Which means...
In this current scenario, and judging by recent history, we should except bitcoin to bounce significantly off of those lows whenever this death cross is confirmed at the very least.
If not put in a longer term bottom and outright change the trend.
So, next time you hear the term Death Cross, do not be afraid.
Instead look at it as a sign that prices are very likely to start moving in the other direction "soon".
Stay informed my friends.
Follow me: @jrcornel
At which price/time does Bitcoin cross the death cross?
I'm cool with this being top comment.
😂 sry, looking like it hasn't crossed yet. Price at posting $7,977.00.
it doesn't have a certain level of occurring, it is even not certain and definite itself; and @jcornel explained it great, it doesn't mean if it happens several time through time, there would be same falls.
BUT
the better question you could make would be: at what level if I hold BTC should stop loss and how low it may get?
I would say (and I'm just one person with some experience in trading) 6900$ is a critical level and 6000$ would be the next resistance (rough numbers)
Given the price now, thinking it has crossed. $6,926.62
Yup, I believe it has made the cross. Very big move down today. :(
The death cross is a bearish sign overall, but it’s not the end of the world. I’m ok seeing BTC put in some consolidation for the next few months. This will give an even stronger base to rise off of. Thanks for the heads up on the death cross!
So basically people just look for patterns and infer causation without understand correlation. This is precisely why technical analysis for cryptocurrency is not quite accurate- there is a lot of guesswork involved.
If everything were this crystal clear then everyone would be doing precisely the same thing and it would cause a self-fulfilling prophecy. If the majority of people believe a death-cross is bad then there will be a sell off.
I was just reading about it and potentially BTC could go a lot lower, in grans scheme of things, its better BTC and alt coins to be back in july 2017 values. This would help to invest and build better block chain products
Hi jrcornel,
So, death cross is when BTC in your chart cause the pricing to reverse or move further the same direction up or down?
Death Cross is where the 50 day moving average crosses the 100 day moving average to the downside.
Thanks for clarification. Make sense since when price goes down most of the time is not good if have a BUY position nor for Altcoins.
Theres blood in the streets.
I've seen a lot about this death cross lately and how everyone's been worrying. But I see it as a positive, and so should you! I think some people look way too far into the technical analysis rather than just looking at the history. History can tell more than any scientist can :)
Don't worry about this 'Death Cross' people, just hold tight, and you will see the light. This I can guarantee!
waooo.this is so amazing
Yea, I think lots of people make the death cross out to be more than it really is. Although plenty of trading programs look for these signals, and trade accordingly. Hopefully, a quick dip, followed by some smart buys and then BTC gets things moving upward again.
Technical Analysis is trying to find patterns in the way the price is moving. Because so many people use some kind of technical analysis for the placing of stop orders, it can provide a clue for what will happen in the short term. So if there is a death cross in the next little while, it could prompt some strong selling in the short term, possibly presenting a good buying opportunity.... BTC @ $7507
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