Bitcoin: ‘Death Cross’ Marked, is it a Bear Trap?
The price of Bitcoin is back below $7,000 and trading at its lowest price since 7 February.
According to CoinDesk’s Bitcoin Price Index, the world’s largest cryptocurrency is changing hands at $6,700, a move that follows its steady decline from around $8,000 since the start of the 29 March trading session, a 15% on the day.
That price puts Bitcoin at a 51-Day low, -42% from a recent high at $11,660 marked on 5 March, and 60% off its Y 2018 high of $17,144 posted on 7 January.
The Y 2018 low for Bitcoin was marked at $5,947 on 6 February, according to CoinDesk’s data.
Data from CoinMarketCap shows the market capitalization of all cryptocurrencies is now at a 3-month low of $256-B, a 70% Fibo retrace since its Y 2018 high above $800-B in early January 2018.
The Top 20 tokens are all showing a 10 to 20% sell-off within the last 24 hours.
Bitcoin risks entering a technical “death cross” soon, but the Bearish signal might not be as severe as has been made out in reports.
A death cross occurs when the 50-Day MA cuts the 200-Day MA from above (Bearish crossover), indicating a long-term Bear market going forward.
As seen on the Bitcoin daily line, the 50-day MA looks set to fall below the 200-Day MA in here.
Some strategists are saying that the death cross could yield a big sell-off in BTC, possibly to as low as $2,800, a level last seen in September 2017.
Shayne and I see such fears as overstated, as the crossover tends to work as a contrarian indicator, meaning they tend to occur at the end of a big Bear move, with prices rallying soon after aka a Bear Trap where in the days ahead, Bitcoin may trap the Bears on the wrong side of the trade, as seen in April 2014 and September 2015.
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