- At the moment of the decline of Bitcoin these days, eagle-eyed charting scholars suspect an at hand technical breach could be at hand: the coin is approaching a bearish pattern known as the death cross.
The world's largest digital currency has been trading down, pushing its average price to its 200 day moving average over the last 50 days. Should the long-term line cross below the short one, the coin would reach the forbidding formation. The indicator is typically seen as a closely read technical measure that could offer a hint at more pain to come.
The last time bitcoin crossed a death-cross was in November 2019 – the cryptocurrency was down approximately 5% one month after it marked it.
While it's not done yet, ''the collision seems at this point unavoidable, wrote Mati Greenspan, the founder of Quantum Economics. A death cross could be an indication that prices may remain low for a while to come.
In the recent weeks, Bitcoin has been embroiled in a downtrend spiral and lost approximately 45% since mid-April when it hit a record high. The recent sale of the cryptocurrency was exacerbated by the public rebuke of billionaire Elon Musk on the amount of energy used by the servers underpining the token. The increased Chinese Regulating oversight also soured the mood.
On Tuesday, Bitcoin plummeted as analysts pointed to a technical breakdown as well as the recovery of Colonial Pipeline Co. s ransom as evidence that crypto isn't beyond government control. The U.S. government last month recovered almost all the Bitcoin ransom paid to the perpetrators of the Colonial attack as a sign that law enforcement is capable of pursuing online criminals even if they operate outside the nation's borders.
In the meantime, charters are eyeing the $30,000 level that the coin touched after a brutal selloff last month. Breaching that round numbers mark, they say, could trigger another wave of selling due to the lack of technical support between $20,000 and $30,000.
Greenspan adds another caveat about death-cross, which is typically followed by a so-called bullish cross which tends to be a golden signal. If prices beat here, then you can probably expect a strong rally to resume once the market is prepared for it, he said.
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