What You Need To Know About The Signal

All across crypto, fear is in the air. Not only is the market shaken from the recent downtrend, but there’s an extra layer of doom and gloom due to an impending “death cross” in Bitcoin.
Learn all about the ominous sounding crossover of two commonly watched moving averages, what the signal could mean, and how Bitcoin price has reacted in the past.

The “death cross” is nigh | Source: BTCUSD on TradingView.com
Does The Bitcoin Death Cross Mean Doom And Gloom For Crypto?
Bitcoin price on daily BTCUSD charts is only days away from completing a “death cross.” According to Investopedia, “a death cross is a technical chart pattern indicating the potential for a major sell-off.” It occurs when a short-term moving average (in this case the 50-day MA) crosses below a long-term moving average (the 200-day MA).
The signal tells investors that the asset’s growth has slowed and is showing potential of a bear trend. Long-term price depreciation is possible. However, in Bitcoin, things don’t always behave the way they should.
Related Reading | 2022: The Year The Secular Bitcoin Bull Run Could End
Across eight total death crosses in the first ever cryptocurrency, the average drop within a month from the cross is a mere 25% (h/t Dan via TonyTradesBTC) – puny by crypto standards.
The opposite signal, golden crosses, also don’t always have a positive impact, either. In fact, Bitcoin price is lower now today than it was when the last golden cross triggered.

The history of death and golden crosses in emoji | Source: BTCUSD on TradingView.com
Data Shows Whether Or Not You Should Fear The Reaper
Such crossovers, are often used to confuse the market during consolidation phases. Ahead of the 2020 bull breakout, there were two death crosses and two golden crosses. One notable death cross in October 2019 resulted in a 42% pump the day prior signal.
Despite the strength, price action was rejected back down to new lows, only to golden cross, death cross, then golden cross again. Ahead of the fabled 2016-2017 bull run, there was also a similar fakeout – depicted in the green box.
Related Reading | The Hidden Bitcoin Trend Line That Could Save The Bull Run
Prior to the 2014-2015 bear market, however, there was a death cross, golden cross, back into a death cross fakeout that closely mimics the situation brewing in Bitcoin right now in the red box.
Another such example could result in a renewed bear phase. But the data otherwise shows that the “death cross” is not a reaper you need to fear.

How will #Bitcoin . React to the “death cross”☠️❓
— NEWSBTC (@newsbtc) January 12, 2022

Follow @TonySpilotroBTC on Twitter or join the TonyTradesBTC Telegram for exclusive daily market insights and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com

David Guttenberg
David Guttenberg
David joined Blockstory as a news reporter in February 2021 after writing widely about crypto and blockchain for two years in other roles. Away from crypto, David is a keen runner and fan of all things sport. He holds small amounts of BTC, ETH, ADA, and LTC.

Related Articles

Stay Connected

22,014FansLike
3,131FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

bitcoin
Bitcoin (BTC) $ 34,768.00
ethereum
Ethereum (ETH) $ 2,362.06
tether
Tether (USDT) $ 0.996044
binance-coin
Binance Coin (BNB) $ 360.19
usd-coin
USD Coin (USDC) $ 1.00
cardano
Cardano (ADA) $ 1.03
xrp
XRP (XRP) $ 0.588405
solana
Solana (SOL) $ 85.78
terra-luna
Terra (LUNA) $ 62.66
polkadot
Polkadot (DOT) $ 16.96
dogecoin
Dogecoin (DOGE) $ 0.132964
avalanche-2
Avalanche (AVAX) $ 59.35
binance-usd
Binance USD (BUSD) $ 0.994442
shiba-inu
Shiba Inu (SHIB) $ 0.000021
terrausd
TerraUSD (UST) $ 0.997303
matic-network
Polygon (MATIC) $ 1.41
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 34,827.00
dai
Dai (DAI) $ 0.999014
crypto-com-chain
Crypto.com Coin (CRO) $ 0.358346
cosmos
Cosmos (ATOM) $ 31.27
litecoin
Litecoin (LTC) $ 104.71
chainlink
Chainlink (LINK) $ 14.89
near
Near (NEAR) $ 10.07
algorand
Algorand (ALGO) $ 0.876956
tron
TRON (TRX) $ 0.054436
bitcoin-cash
Bitcoin Cash (BCH) $ 284.09
okb
OKB (OKB) $ 19.67
fantom
Fantom (FTM) $ 2.01
ftx-token
FTX Token (FTT) $ 33.78
uniswap
Uniswap (UNI) $ 10.24
magic-internet-money
Magic Internet Money (MIM) $ 0.998727
stellar
Stellar (XLM) $ 0.184523
staked-ether
Lido Staked Ether (STETH) $ 2,363.05
internet-computer
Internet Computer (ICP) $ 19.38
hedera-hashgraph
Hedera (HBAR) $ 0.200761
axie-infinity
Axie Infinity (AXS) $ 48.75
leo-token
LEO Token (LEO) $ 3.50
vechain
VeChain (VET) $ 0.047705
compound-ether
cETH (CETH) $ 47.46
ethereum-classic
Ethereum Classic (ETC) $ 23.55
klay-token
Klaytn (KLAY) $ 1.18
cdai
cDAI (CDAI) $ 0.021784
filecoin
Filecoin (FIL) $ 17.93
monero
Monero (XMR) $ 146.47
the-sandbox
The Sandbox (SAND) $ 2.84
frax
Frax (FRAX) $ 0.996515
decentraland
Decentraland (MANA) $ 1.92
elrond-erd-2
Elrond (EGLD) $ 121.91
theta-token
Theta Network (THETA) $ 2.47
tezos
Tezos (XTZ) $ 2.77