Bitcoin history’s first death cross on the weekly chart; Should we wait for a sharp fall in the market?
After the fall of about 5% in the price of Bitcoin last week, now the creation of the first intersection of death in the weekly chart of this digital currency has many analysts worried about the significant decrease in the price and the resumption of the downward trend.
According to Erzdigital, the user account of Bitcoin Archive (Bitcoin Archive), last day with release Bitcoin is witnessing the formation of its first death cross on its weekly price chart, he tweeted below.
This technical signal occurs when an asset’s short-term (eg 50-week) moving average crosses its long-term (eg 200-week) moving average downward, indicating a possible trend change from a bullish to a bearish market.
Benjamin Cowen, the popular digital currency analyst, also in a new video YouTube Noting that Bitcoin is experiencing a death cross on its weekly price chart for the first time, it warned traders that this could signal the beginning of a bearish trend.
The analyst noted that Bitcoin’s 50-week SMA is now at $24,678 and its 200-week SMA is at $24,999.
Cowan explained:
In bear markets [قبلی], the price has almost never fallen below the 200-week simple moving average; It has only moved below this index for a relatively short period of time, which is more or less made up of candlestick shadows. In the current bear market, however, the price of Bitcoin has essentially been below this line most of the time since June.
Cowen went on to say that the worst possible scenario for Bitcoin is a repeat of the Nasdaq pattern after the dot-com bubble burst between 2000 and 2002, which caused a deeper stock market crash.
He says:
After a 60% growth to the 50-week moving average level, the Nasdaq index saw a 77% correction in its value and then continued its downward trend and reached its lowest level. But note that Nasdaq also experienced a two-stage correction. First it rose to the level of the 50-week moving average, fell and remained in that range for about a month, rose again and then fell. This is the trend that Nasdaq experienced at that time. So, you better be careful with Bitcoin.
However, some analysts believe that the golden intersection and death do not signal the beginning of a new trend and usually confirm the latent change in the trend; Because these indicators are based on the moving average, which itself is a lagging indicator.
A Bitcoin analyst named Steve (decodejar on Twitter) with Hint In his opinion, the intersection of death is like an echo that usually occurs at the end of a downward trend, in his analysis of the current situation, he said:
More important is the slope of Bitcoin’s long-term (eg 200-week) moving average, which is currently bullish.
The current 85% correlation coefficient between Bitcoin and the S&P 500 index has made another analyst named Lukasz Wydra To predict the Bitcoin price trend, examine the behavior of this index in similar conditions.
He said:
The formation of this death intersection model in the SND 500 index is also very rare. However, since the 1970s, the formation of this intersection has caused the value of the S&P 500 index to reach multi-year lows. But is the same thing waiting for Bitcoin? In my opinion, such a scenario is unlikely to occur and would require a large black strong event to occur. However, there is still a possibility of a price drop.
