As a seasoned crypto investor with a decade-long journey in this rollercoaster market, I must admit that the recent price drop and death cross formation for Bitcoin ($BTC) has me feeling a bit of déjà vu. Remembering the previous death cross incident in October 2023, when BTC was trading around $27,000, I can’t help but recall the words of Mark Twain: “History doesn’t repeat itself, but it often rhymes.”
The price of the flagship cryptocurrency Bitcoin ($BTC) has dropped by more than 10% over the past week to now trade at around $57,500 per coin, but the price drop saw the cryptocurrency teetering on the brink of a bearish technical pattern known as the “death cross.”
Based on a chart posted by financial data provider Barchart on Twitter, it appears that the cryptocurrency’s price trend could be shaping up into what is known as a “death cross” on its annual chart. This pattern suggests potential bearishness in the long term.
Imminent Death Cross Formation for Bitcoin $BTC ☠️ — Barchart (@Barchart) August 7, 2024
In simpler terms, a “death cross” happens when the short-term average line of a currency’s price graph falls beneath its long-term average line. For instance, the 50-day moving average for a cryptocurrency might start dipping below its 200-day moving average in this scenario.
Based on Investopedia’s explanation, the “death cross” pattern often indicates an upcoming short-term recovery that may yield above-average gains.
Cryptocurrency experts noted that by October 2023, Bitcoin experienced a “death cross” – when its short-term average price trend dipped beneath the long-term average trend. However, this situation swiftly reversed as the Bitcoin price began to climb steeply.
That death cross was formed with Bitcoin trading at around $27,000 and was followed by a bull run to a new all-time high around $73,000 after the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs) in the country in January 2024.
Over the last month, an enigmatic purchasing frenzy swept through the Bitcoin market, leading to the emergence of a “death cross” pattern. This situation occurred as long-term investors accumulated approximately $23 billion worth of Bitcoin, fueling a growing interest that has ignited debate about potential price increases due to heightened demand and speculation.
In the past few days, the cryptocurrency market experienced a significant drop, causing the Crypto Fear & Greed Index to reach its lowest point in about two years. This decline indicates that investors are feeling “severe apprehension” or “extreme fear,” a sentiment not seen since July 2022.
As a seasoned investor with over two decades of experience under my belt, I’ve seen countless market cycles and witnessed firsthand the ebb and flow of investor sentiment. The recent surge in the cryptocurrency market, particularly Bitcoin, has caught my attention, and I’m intrigued by an index that leverages various sources, including social media, to gauge investor sentiment.
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2024-08-08 18:08