Bitcoin 'Death Cross' - This happened in the past

What is it?

What is such a death cross? Technical analysts call the crossing of the 50-day moving average (MA) by the 200-day MA a death cross. This means that the 200-MA is crossed by the 50-MA from above. The other way around, we speak of a golden cross.

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The death cross is an important indicator for many investors. In the past, the signal preceded several major bear markets in the traditional markets such as those in 1974 and 2008. On the bitcoin chart we also find several death crosses. There we see that a death cross does not immediately mean that everything collapses.

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Bitcoin Death Crosses

For the first real death cross on the bitcoin chart of crypto exchange Coinbase, we have to go all the way back to 2018. After a bizarre bull market that lasted for several years, in which bitcoin increased in value by 2,000% in the last year, we see a death cross in March 2018. This death cross was formed after bitcoin had already fallen in value by 50%, which immediately shows that it is a so-called lagging (delayed) indicator. Often the signal follows only after the decline has already begun. What followed after the death cross in 2018 was indeed a long period of falling prices.

We also see a death cross after the short bull market in 2019. This time the outbreak of the corona virus proved to be the salvation for bitcoin. After the massive corona crash in March 2020, the price turned right around and we got the legendary run that eventually lifted us to a price of $65,000.

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https://preview.redd.it/hm62vp14ntb81.png?1372&format=png&auto=webp&s=1fe3324687a6e53c9d0c6494d51f2137d2d51c66

Death cross in 2021 was followed by rise

Another proof that the signal does not have to be bad news right away is the death cross in 2021. Instead of a big drop, a new rise followed to the current all-time high of $69,000.

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Moral of the story: Traders should not just throw in the towel on the basis of a death cross. It only serves as one of the many indicators and signals with which to make an assessment.