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RE: Crypto Suddenly Spikes Higher As Bitcoin 'Death Cross' Looms
I think I consider this simply good news but if I may as, since I am still new to the crypto world...What happens when bitcoin gets to the dreaded death cross?
It's a popular indicator of an asset about to take a dive in value. It doesn't always happen that way but, judging from past "death crosses" (50 DMA falling below the 200 DMA) the vast majority of past occurances do end up in that asset "crashing." It doesn't mean the end of the asset - just that it's probably going to take a long time for that asset to recover its' value. So, everybody bails out, many "trading bots" kick-in their sell orders, etc. It usually has a powerful psychological effect on the market.
I wouldn't call this "good news." I would call this news which we should all take note of and cause us to proceed with caution. Just because the "death cross" seems to be responding as a strong level of support, that doesn't mean that it will continue to hold as support. If the cross does occur, I would expect - at least - a $2,500+ drop in the BTC price. Lower levels of support are not very good: $6K, $4K, $2K, and some people even say $1K. So, stay alert!
If you're holding a bunch of BTC, a death-cross would suck. If you're sitting on the sidelines with a bunch of cash, waiting for the price to crash so you can buy low - a death-cross would be great.
As always, I am not a financial advisor. Do not make trades based on anything I have said here. X(