Bitcoin: ‘Death Cross’ Marked, is it a Bear Trap?

Bitcoin: ‘Death Cross’ Marked, is it a Bear Trap?

Bitcoin: ‘Death Cross’ Marked, is it a Bear Trap?

$BTCUSD

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.

As reported before, the second to 4th largest cryptocurrencies by volume – ethereum, ripple and Citcoin cash – have all hit Y 2018 lows.

Earlier in Thursday’s trading session, the price of ethereum also broke below $400, the 1st time since November 2017.

Bitcoin risks entering a technical “death cross” soon, but the Bearish signal might not be as severe as has been made out in reports.

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.

Notably, it takes a lot of strength on the part of the Bears to push the 50-Day MA below the 200-Day MA.
Currently, Bitcoin is trading at: 6,684.9648, -936.81, or -12.29% as of 5:34a BST, the market is open.
Having failed to beat the resistance around $9,000 the cryptocurrency did revisit its recent low of $7,240, a move that confirms confirm the death cross, but could also push the RSI near the historical Key Bull reversal zone of 30.00-27.00.
Have a terrific Easter weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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