Bearish or bullish? Bitcoin Traders Arguing Over Death Cross Result – Market Updates Bitcoin News
On Saturday, cryptocurrency analysts and traders discussed Bitcoin’s recent chart patterns, and the infamous death cross pattern was a topical talk. A number of traders believe the crypto-asset could be prepared for a big sell-off if Bitcoin’s short-term moving average (MA) falls below the long-term MA. Meanwhile, others are certain that the Death Cross technical pattern means the price is on a rebound and possibly a double-top on higher levels than the previous all-time high.
The return of the infamous death cross
On June 19, a series of Twitter conversations, forum posts, and even headlines discussed the technical pattern called the Death Cross in relation to the Bitcoin (BTC) charts. Bloomberg published an article on the Death Cross on Saturday and the release contained some testimony from billionaire investor Mark Cuban. Investopedia’s definition of a death cross states that the pattern suggests “the potential for a major sell-off”. The definition of the website adds:
The death cross appears on a chart when a stock’s short-term moving average falls below its long-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages.
The death cross doesn’t necessarily mean a bearish market is due, however. Investopedia states that death cross events over the past century, including 1929, 1938, 1974, and 2008, resulted in traditional stock market crashes. Death crosses are not uncommon, and data from Canterbury Investment Management shows the Dow Jones Industrial Average has seen 84 death crosses since 1929. Popular economist and trader Alex Krüger discussed the situation of a death cross on BTC / USD charts on Saturday.
“The death cross takes place when the 50-day moving average falls below the 200-day moving average,” Kruger said tweeted. “The death cross takes place when the 50-day moving average falls below the 200-day moving average. Journalists love to write about how a death cross could create a bear market. However, the historical returns for a week after a Bitcoin death cross are POSITIVE. Relax, ”emphasized Krüger.
The popular creator of the Bitcoin stock-to-flow model, Plan B, also tweeted about the infamous Death Cross on Saturday. “Study this diagram to see what happened [the] the last time the cross of death happened, Q4 2019 and Q1 2020 ”, Plan B said to his 566,000 followers.
However, a person named Mohit Sorout responded to Plan B’s tweet, noting that there had been a number of Death Cross opportunities throughout the life of Bitcoin.
“There were six death crosses in Bitcoin’s lifetime,” said Sorout answered to Plan B. “4 have led to enormous disadvantages. The two that didn’t result in a downtrend were at the end of a bear market, not a full-blown bull run. Choose your bias wisely, ”he added.
Bitcoin traders hope to see a double-top pattern emerge in 2013
CNBC’s Crypto Trader Show creator and host Ran Neuner also wrote about the Death Cross on Saturday. “Bitcoin shorts will be closed,” Neuner said. “This is confirmation that the shorts were speculative and that it was not about protecting the miners. We said this would be in anticipation of the “death cross” that was due to come around June 24th. Expect more FUD. I do not sell.”
A crypto enthusiast named Sultan also discussed the Death Cross situation with his followers, saying that it could mean the worst is behind us. “Death Cross”, Sultan wrote. “Ironically, death crosses are often a sign that the worst is behind us. In 2019 DC, Bitcoin had already experienced a -47% dip before the DC flashed, with a 52% recovery afterwards. And a -64% dip before DC 2020 with a quick 150% recovery, ”he added. Another person wrote to Plan B and said:
A real death cross is when both MAs point down. Good luck to everyone trading the current cross on BTC.
Nobody really knows what will happen, although a number of traders are confident that their predictions will come true. Investor and market observer John Hostetler also spoke about the death cross scenario on Sunday. “Only a fool could deny that this Bitcoin DeathCross looks more like a bearish cross in red than a bullish cross in green,” said Hostetler said. “But I like the way the BTC price has fallen this week, as if to say, ‘Let’s get it over with and we can go up'” “
“In the end, little changes at the cross,” continues Hostetler stressed. “The big question remains: Has this halving cycle reached its climax? Two weeks ago I would have expected a probability of 1% because I hadn’t looked at the now bleak Bitcoin S2F Multiple chart for a while. Since then, I’ve increased the odds to ~ 20%. But that’s still 80%. So I continue with the Bitcoin double top model and draw hope from the summer of 2013, when $ BTC only got a touch of a death cross: gray arrow on the chart, ”he concluded.
What do you think of the Bitcoin death cross chart pattern? Do you expect a bear market or a bull market in the future? Let us know what you think on this matter in the comments below.
Photo credits: Shutterstock, Pixabay, Wiki Commons, Sultan, Plan B, Alex Krüger
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