Analyst detects “death cross” pattern on bitcoin price chart

The material is not an investment recommendation and is published for informational purposes only.

What’s new? On August 15, a crypto trader and analyst under the nickname Mags recorded a pattern called “death cross” on the daily price chart of bitcoin, which may indicate a weakening of the market in the short term. The pattern was formed as a result of the 50-day moving average (MA) of the asset price falling below the 200-day MA.

Source: X.com

“Death cross” is a technical analysis indicator when the short-term moving average (MA) crosses the long-term MA, heading downward. It indicates a high probability of a bearish trend development.

Moving Average reflects the average value of an indicator (in this case, the price of an asset) for a certain time period.

What else is known? At the same time, the analyst admitted that the “death cross” can be a good sign. In the past, such a pattern has already formed twice on the price chart of bitcoin, and in both cases, the rate of the asset added about 50% after four months.

For example, in September 2023, the 50-day MA also fell below the 200-day MA, the exchange rate then stood at $26 578. By January, it had added 49% to reach $39 518. In July 2021, the 50-day MA was $34 671, while the 200-day MA was $44 680. Similarly, four months later, the rate rose 54% to $54 813.

According to the analyst, if the situation repeats now, the rate will consolidate in a narrow range for a few weeks before recovering the short-term MA, followed by the “golden cross”. This pattern is bullish and indicates an upcoming upward reversal.

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Earlier, CryptoQuant analyst, based on the data on the price movement of BTC in previous halving years, admitted that the rate growth should be expected in Q4 of the current year.

Bitcoin has lost 4,3% over the week, and in the last 24 hours has dropped below $57 000 at one point. CryptoQuant suggested that the fall was the result of bears, who began selling off the asset amid news about the movement of a large volume of coins to exchanges by the US authorities.