As a seasoned researcher with over a decade of experience in the dynamic world of financial markets, I have witnessed countless market cycles and patterns, from bullish surges to bearish plunges. The recent “Imminent Death Cross Formation” in Bitcoin’s chart has piqued my interest, not as a harbinger of doom, but as a potential opportunity for insightful analysis.
Right now, Bitcoin‘s chart shows a significant pattern. Over the last month, its price movement has been both bullish and bearish. According to Barchart, a service that provides financial market data, Bitcoin may be approaching a “Death Cross Formation,” indicating potential trouble ahead.
On Monday, this structure emerged amid Bitcoin’s substantial decline, which saw its worth plummet by thousands, reaching a low of $49,781.
Death Cross And The Implication For Bitcoin
A “death cross” signals a possible significant drop in an asset’s price, as represented by a graphical pattern. This pattern emerges when the short-term average line of the asset moves above its longer-term average line on the chart.
Usually, in this particular approach, the often employed averages are the 50-day and 200-day moving averages. In Bitcoin terms, when a ‘death cross’ occurs, it might indicate an approaching significant drop, as it signifies that the short-term momentum is decelerating compared to the long-term trendline.
To clarify, not all death crosses lead to an extended downtrend for Bitcoin. In fact, Bitcoin has demonstrated its ability to overcome previous death cross situations.
In March 2020, a “death cross” occurred, which is usually a bearish signal for Bitcoin. However, contrary to expectations, Bitcoin bounced back after this event and touched record highs towards the end of that year. A similar scenario unfolded in June 2021 when another “death cross” was spotted. Yet again, Bitcoin recovered strongly from this point, eventually reaching new heights several months later.
In these cases, it’s important to note that a death cross, though often seen as a bearish signal, does not always predict the direction of long-term price trends.
Market Performance And Short Term Outlook
Currently, Bitcoin, which peaked at $57,707 earlier today, has since dropped and is now being traded at $56,057, representing a decrease of approximately 0.8% over the last 24 hours.
As an analyst, I’ve observed a significant drop in Bitcoin’s market cap valuation, amounting to over $200 billion within the past day. However, surprisingly, the value of this asset has shown a rise in trading during the same period. In the wee hours of Wednesday, it was valued at approximately $26.7 billion, but as I speak, it’s surged above $43.5 billion.
In simpler terms, well-known crypto expert Ali has disclosed his technical perspective on the asset, indicating that the Bitcoin graph displays a “typical rising wedge” – a pattern implying a potential drop to around $54,500 if Bitcoin breaches its current support at $56,800.
As an analyst, I noted that Ali pointed out a significant detail – if Bitcoin (BTC) manages to close a daily candle above the $58,000 level, the current trend or pattern could potentially be deemed “invalidated.” In simpler terms, this means that the existing price trend might not hold true and could change direction.
As a seasoned cryptocurrency investor with years of experience under my belt, I have learned to read charts and patterns like a pro. Based on my analysis of the current #Bitcoin trend, it appears that we are looking at a classic rising wedge formation. If #BTC breaks the $56,800 support level, a correction towards $54,500 is likely. However, if Bitcoin manages to close above $58,000, this pattern could be invalidated, which would be great news for bullish investors like myself. I have seen similar patterns play out before and have made significant profits by being prepared for such movements. So, keep a close eye on #BTC’s price action and be ready to make your move accordingly!
— Ali (@ali_charts) August 7, 2024
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2024-08-08 12:05