Bitcoin Price May Not Reach $70,000, BTC Death Cross Might Trigger 10% Drop

August 10, 2024 William Ross Cryptocurrency News, Stock Market 0

Bitcoin Price May Not Reach $70,000, BTC Death Cross Might Trigger 10% Drop

The bitcoin price is currently facing the ominous “death cross,” a pattern that has historically caused panic among investors. But before we jump to conclusions, let’s understand what this indicator really means.

What Is a Death Cross?

A death cross occurs when the 50-day simple moving average (SMA) of an asset’s market price falls below the 200-day SMA. In the case of Bitcoin (BTC), the 50-day SMA is currently at $62,332 and declining, potentially crossing below the 200-day SMA at $61,605.

The Bear Trap Scenario

However, here’s the catch: the death cross is not a reliable predictor of future price trends. In fact, it often leads to overreactions and unnecessary panic.

For instance, the previous death cross confirmed on September 12, 2023, turned out to be a major bear trap. BTC bottomed out at $24,900 on the same day and then surged to new record highs above $70,000 in March of this year. Investors who had positioned for further declines were caught off guard.

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The Mixed Record

Historically, death crosses have had a mixed record. Out of the previous nine occurrences, only five actually led to prolonged downtrends, according to CoinPEdia.

What Lies Ahead?

Bitcoin’s near-term prospects depend on various factors, including U.S. economic data and volatility in the Japanese yen. Continued demand for the yen in foreign exchange markets may impact risk assets like BTC.

In summary, the death cross is unreliable, and we should approach it with caution. Rather than panicking, let’s keep an eye on broader market dynamics and make informed decisions.

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William Ross
About William Ross 334 Articles
I am a cryptocurrency enthusiast and writer with over five years of experience in the industry. I have been following the development and innovation of Bitcoin and Ethereum since their inception, and I enjoy sharing my insights and analysis with readers. I have written for various reputable platforms, such as CoinDesk, Cointelegraph, and Decrypt, covering topics such as market trends, regulation, security, and adoption. I believe that cryptocurrency is the future of finance and technology, and I am passionate about educating and informing people about its benefits and challenges.

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