The “death cross” that pushed BTC price down to $28.8k in early May has reappeared
A bearish crossover between Bitcoin’s 20-day and 200-day exponential moving averages suggests a drop towards the $40,000 – $42,000 region.
On December 18, BTC price experienced a death cross, a market indicator that occurs when the short-term moving average slips below the long-term moving average. In this case, Bitcoin’s 20-day exponential moving average (20-day EMA) would close below the 200-day exponential moving average (200-day EMA).
This indicator can alert traders and investors to a potential sell-off in the coming sessions, based on its downtrend prediction history. For example, the 20-200 downtrend crossover that occurred on May 30, 2021, was instrumental in the BTC price drop from $36,500 to $28,800 over the next 24 days.
A similar death cross also occurred during the market crash caused by the pandemic in March 2020, exactly one day before the Bitcoin price dropped from nearly $8,000 to under $4,000.
BITCOIN RISK OF A RIGHT TO THE $40K-42K Range
Bitcoin has been in a steady correction over the past four weeks and looks poised to end its ongoing weekly trading session in a losing streak, primarily with the Federal Reserve taking more aggressive action on Bitcoin. with inflation.
Over the past 30 days, the price of BTC has dropped by nearly 17.50%, including a correction from a record high of $69,000 on Nov. 10. In doing so, the cryptocurrency fell to a one-time high of $42,333. short period, only a strong recovery after that, reducing some of the losses, as shown in the chart below.
However, the rally did not turn into a bullish reversal – Bitcoin price has trended lower after finding temporary resistance near $50,000, a psychological level.
Bitcoin’s attempts to retest $50,000 for a bullish breakout face resistance from the resistance trendline of the descending channel, combined with additional bearish pressure from the 20-day EMA and 200 EMA. day, is also near 50,000 USD.
As a result, the path of least resistance for Bitcoin appears to be down. And with the death cross in place, the cryptocurrency is likely to continue trending inside the descending channel to test levels around $42,000 for a strong pullback move.
If the decline accelerates, the price could reach $40,000 next as its downside target.
A further low would also push Bitcoin’s daily relative strength index (RSI) to its oversold territory below 30, a buy signal. Currently, the momentum indicator has attempted to break above its downward sloping trendline, a move that previously predicted a local bottom for Bitcoin.
On the shorter time frame chart, the RSI is consolidating sideways, predicting that it will break out of the rectangular range to the upside. Mozzi, an independent crypto market analyst, shared that at the core of this optimistic outlook is a surge from September 2021.
$44,000 MAY BE A ‘bottom’ too
A similar scenario has been forecasted by analyst Michaël van de Poppe, who posted the following chart outlining a rough outline of how BTC price action could play out over the next few months.
Based on the chart provided, van de Poppe sees the possibility of another drop to the $44,000 range, followed by a return to current levels for a brief period of consolidation and then a continuation of the uptrend. .
EFFICIENCY VERSION DOESN’T CHANGE THE POTENTIAL STRENGTH
One final bit of insight comes from crypto analyst “TechDev,” who posted the following chart detailing a more macro view of BTC’s price action after each halving cycle.
TechDev has previously identified two cases where BTC price saw periods of intense volatility only to be followed by a late-stage rally and price rally to new ATHs.
A little bit about us:
Primexbt trading was born a few years ago but it has soon established itself in the financial market. Here, you can trade from cryptocurrencies, forex, commodities and indices… Outstanding advantages of Primexbt trading such as: beautiful interface, easy to use, low fees, leverage for home use. investors make money even when the market is down, complete set of supporting indicator tools, Primexbt convesting technology helps new investors to refer to trades of professional investors, Primexbt turbo technology allows demo investors before entering actual orders……