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You must have read it on a website, watched it on youtube, or found it on Twitter.
The most dreaded ‘Bitcoin Death Cross’ is coming.
If it comes, Bitcoin’s price will drop down to around $28,800.
That’s what analysts say!
But isn’t $28,800 too bearish?
Bitcoin has already experienced enough downfall since it made a new All Time High at around $69,000 on November 10.
Even over-hyped Bitcoin analyst Plan B’s Stock-to-Flow model failed in its attempt to drag Bitcoin up to $135K by the end of 2021.
At the time of writing, Bitcoin is changing hands at $41,270.
If the bearish rumours are true, Bitcoin needs to drop down by around 30%.
But will it happen?
Will Bitcoin death cross really bring Bitcoin’s price down to $28,800?
Let’s dig deeper to find out!
What is Bitcoin Death Cross?
Bitcoin death cross is a technical pattern in the Bitcoin price chart. It occurs when the 50-days moving average crosses below the 200-days moving average.
Bitcoin death cross serves as an important indicator of future price movement as it signals a shift in market sentiment and momentum.
In general sense, a bitcoin death cross is a bearish indicator as it implies Bitcoin’s price is going downhill.
If that is true, we may see a major sell-off as investors lose faith in Bitcoin’s short-term price action.
But, what if it is not true?
What if a Bitcoin death cross does not always lead to price downfalls?
Is it always bearish?
Funny as it may sound, Bitcoin death cross does not always resemble bearish sentiments.
In its entire history, Bitcoin has seen a death cross 8 times. Out of those 8 death crosses, 4 marked the bottom whereas 4 marked the top.
Now, tell me, should you trust an indicator that has a 50-50 chance of occurence?
Look at the most recent Bitcoin death cross we saw last June.
Didn’t it mark a major price bottom?
Didn’t we see a fresh bull run after the consolidation in mid-June?
If the answers are yes (which indeed are!), you seriously need to reconsider your emotional state.
You are being afraid without a strong reason.
Remember, the Bitcoin death cross is not a reliable indicator because it is a standalone indicator. It is based on backward-looking data and tends to lag prices.
By the time the death cross is confirmed, the market is often oversold and due for a bounce.
So, if you want to fall victim to fabricated FUD and sell your cryptos go ahead.
I’m not selling mine.
Neither is Cryptoman Ran.
What to expect ?
If Plan B’s most famous S2F model can fail, anything can happen in the crypto space.
Out of 8 Bitcoin death crosses, the market went down on 4 occasions while it went up on the other 4 ones.
So, there is a 50-50 chance of either an upward trend or a downward trend.
If you’ve been reading this carefully so far, you must already know why I called this Bitcoin death cross a failure.
It is a standalone indicator.
Do you want a piece of advice from me?
Never blindly follow only one indicator.
Mix your TA with some macros and fundamentals.
That’s how you get your answer.
Since Bitcoin’s ATH on November 10, Bitcoin has consistently been spiraling down.
December 4 saw the crypto market tank following news of Evergrande going default. The market could not recover enough before fear of FED announcing quantitative tightening and raising interest rates brought the market further down.
Mark my words.
Bitcoin is seriously oversold at this price.
We are already very close to the bottom.
Bitcoin has already revisited September 21’s low of $39,600.
There is still a chance for Bitcoin to revisit August 5’s low of $37,332 before it bounces back.
By the way, I’ve got news for you.
We just saw a Bitcoin death cross on January 15.
January 15’s Death Cross
It has been months since everyone has been talking about the Bitcoin death cross.
But, when we really saw the Bitcoin death cross on January 15, why did noone speak about it?
Except for a handful of crypto educators, everyone else stayed quiet.
Instead of falling down, Bitcoin closed the day with a green candle at $43,084.
This clearly shows how people want to create FUD to make newbies panic and sell their coins.
Will the market continue to dip?
One important point to note is that when we saw a Bitcoin death cross last year, Bitcoin traded down for 37 days.
So, this time we could see the same- Bitcoin may trade down for 37 days.
That would be until February 21.
But, Bitcoin may not continue to trade downwards. It may go sideways for some more days before heading up.
Remember, there is more institutional demand than ever this time.
And for those who think Bitcoin is going down because of the Bitcoin death cross, ‘Grow Up!’
‘Did you know that crypto markets tend to follow trends in stock market these days?’
‘And, did you know stock options are expiring on January 21?’
Well, let’s leave this topic for another article.
But for now, just continue buying the dip because Bitcoin won’t stay this low forever.
(Disclaimer: I am not a financial advisor. Please use my articles to educate yourself on cryptocurrencies, but not as a sole factor to influence you to blindly jump into cryptocurrencies.)
