Bitcoin Experiences Rare Death Cross Formation, History Repeats Itself
Bitcoin has once again flashed another particularly deadly formation that often sends its price into a downward spiral. This time around, a death cross that has not been seen in the digital asset for more than one year has appeared again. The last time this formation occurred, Bitcoin experienced a significant drop in value.
In a post on X (formerly Twitter), pseudonymous crypto analyst Game of Trades alerted the Bitcoin community to the appearance of the death cross. The death cross is formed when the 50-day moving average crosses below the 200-day moving average. This took place on Wednesday, September 13, while Bitcoin was maintaining its support above $25,800.
The last time the 50-day moving average crossed below the 200-day moving average for Bitcoin was back in January 2022. Following this formation, the price of Bitcoin rapidly plunged, resulting in a loss of over 60% of its value by June.
Despite the implications of this death cross, it does not necessarily mean that the price will immediately start falling. According to Game of Trades, there have been instances where death crosses have appeared and the asset still went on to rally before eventually falling. The analyst pointed out previous occurrences in April 2014 and September 2015 when Bitcoin saw upside first before experiencing significant downside or no major downside following the death cross, respectively.
If Bitcoin adheres to the pattern seen in 2022, it could be devastating for its price. A 60% drop from its current level of $26,300 would signify a new cycle bottom. However, another crypto analyst known as @BigCheds on X suggests that the death cross could be invalidated if Bitcoin can hold above $25,000. In that case, the formation may not have a significant impact.
Despite the flagging of the death cross on Wednesday, the price of Bitcoin is still holding above $26,300 as of Thursday morning. This indicates that there may be enough demand in the market to counteract the bearish formation.
As the cryptocurrency market observes this rare death cross, it remains to be seen whether history will repeat itself or if Bitcoin will defy expectations and chart a different course. Market participants are closely watching for any signs of a potential downward spiral in the near future.
(Quote: “If $BTC holds 25k nothing else matters” – Cheds, Trading Quotes)
Source: [X](https://x.com/GameofTrades_/status/1701981561812660607?s=20)
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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