Analyst Warns of Potential Bitcoin ‘Death Cross’ and Dump to $18,000
An ominous technical indicator called the ‘death cross’ is looming suggesting that the Bitcoin bull market could well be over. Cryptocurrency trader ‘Rekt Capital’ has observed the bearish signal stating “whenever a Death Cross occurs, BTC experiences deeper downside,”
A death cross is a technical chart pattern indicating the potential for a major sell-off or strengthening downtrend. It appears on a chart when an asset’s short-term moving average crosses 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.
#BTC is on the cusp of a potential Death Cross
Whenever a Death Cross occurs, BTC experiences deeper downside
How likely is it that this Death Cross occurs for $BTC?
And if it does – what should we potentially expect?
Here’s a thread with my thoughts about the Death Cross:
— Rekt Capital (@rektcapital) June 1, 2021
Bearish Trend Confirmation
The analyst stated that there is a lot of lag before a death cross occurs and a lot of the selling may already have taken place.
Since its $65K all-time high, Bitcoin has already lost 43.5% to current levels which is nothing out of the ordinary for correction sizes. However, the foreboding technical signal could mean that there is a lot more pain to come.
The analyst drew a comparison to the 2017 bull market and the time it took for the death cross to occur:
“When BTC peaked in 2017, it took 107 days for the Death Cross to occur. That’s 3.5 months. And during those 3+ months… Bitcoin dropped -70% from the $20,000 peak,”
He added that once the death cross happened in April 2018, Bitcoin experienced an additional -65% correction to the downside as it fell to $3,200 in December of the same year.
The mini-rally in mid-2019 was similar with the death cross showing 149 days after the peak. By this time, BTC prices had dumped 53%, but a further dump of 55% came after the cross.
History Repeating for Bitcoin?
The analysts attempted to predict when the death cross would occur:
“If history repeats, BTC could see its Death Cross occur sometime between very late July or in early September 2021,”
Using previous figures from previous cycles, he suggested that a 55% decline from a death cross appearing at around similar levels from the peak would send prices tumbling to around $18,000.
He added that a fall like this would return prices to the 200-week moving average which has traditionally been a major support and long-term buy zones.
“Which ties in with the 200-Week EMA which tends to offer fantastic opportunities with outsized ROI for BTC investors,”
At the time of press, BTC was trading flat on the day at $36,660 according to CoinGecko.