As Bitcoin continues to decline in value, the cryptocurrency’s death cross is painted. Casper’s Jameson Lopp says we’re not out of the woods yet and many more crashes are ahead.
The “bitcoin death cross 2022” is a term used to describe the point in time when the price of bitcoin drops below its previous low. Bitcoin’s price is currently at $10,000, meaning this event could take place as early as 2022.
On January 8, Bitcoin (BTC) created a trading pattern that conventional chartists are eyeing for its ability to predict future losses.
The cryptocurrency’s 50-day exponential moving average (50-day EMA) dipped below the 200-day exponential moving average (200-day EMA), triggering a “death cross.” Bitcoin has been on a rollercoaster ride in the past two months, falling nearly 40% from its all-time high of $69,000.
BTC/USD price chart on a daily basis. TradingView is the source of this information.
Death has a long history throughout history.
In the past two years, previous death crosses have not impacted Bitcoin. A 50-200-day EMA bearish cross, for example, emerged in March 2020 after BTC price plunged from around $9,000 to below $4,000, proving to be a decline rather than predictive.
Moreover, as can be seen in the image below, its presence had minimal impact on Bitcoin’s rise to around $29,000 by the end of 2020.
BTC/USD daily price chart with a death cross in March 2020. TradingView is the source of this information.
In July 2021, there was a death cross on the daily Bitcoin charts that was more lagging and less prophetic than the one in March 2020. It did not result in a huge sell-off as a result of its occurrence. The price of BTC, on the other hand, essentially stabilized sideways until it rose to $69,000 in November 2021.
Death cross on the BTC/USD daily price chart. TradingView is the source of this information.
In both cases, however, the bearish moving average crosses were followed by favorable news, which may have minimized their impact on the Bitcoin market.
For example, in July 2021, Bitcoin price recovered largely as a result of rumors that Amazon would start accepting cryptocurrencies for payments — which later turned out to be false — and as a result of a conference dubbed “The B-Word,” at which Twitter CEO Jack Dorsey, Tesla CEO Elon Musk and ARK Invest CEO Cathie Wood all raved about Bitcoin.
Similarly, Bitcoin rose dramatically from below $4,000 in March 2020, in part due to the announcement of lax monetary policy by the US Federal Reserve in response to the stock market crisis triggered by the coronavirus epidemic.
This time the death cross appears to be harmful.
Bitcoin’s recent slump has reflected increased investor fears about the Federal Reserve’s intention to quickly unwind its accommodative monetary policy in 2022, which includes a cut in its $120 billion monthly asset purchase program as well as three rate hikes.
Interest rates often rise, making unpredictable investments like Bitcoin less tempting than government bonds, which provide guaranteed returns.
“This is confirmation that bitcoin behaves like a risk asset,” Noelle Acheson, director of market research at cryptocurrency lender Genesis Global Trading, told the Wall Street Journal, adding that short-term investors will be “closest to the exit.” .
Bitcoin could go below $30K in September, according to a trader
As a result, the general decline in cash liquidity, along with the death cross formation, could lead to further sell-offs in the Bitcoin market. That is, until BTC price recovers from the current support level around $40,000, which is represented by the 0.382 Fib line in the chart below.
Daily BTC/USD price chart with Fibonacci retracement levels. TradingView is the source of this information.
However, a break below $40,000 could push Bitcoin’s price to the next Fib line support below $35,000.
The thoughts and opinions of the author are entirely his or her own and do not necessarily reflect those of Cointelegraph.com. Every investment and trading choice has risks, so do your homework before making a decision.
The “btc price prediction” is a question that is often asked. The answer to this question will be different every day as the Bitcoin value is volatile.
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