“The cross of death is here,” tweeted famous analyst PlanB. Long-term moving averages are able to provide a robust trend – a best-fit line, so to speak, creating an idea of baseline demand. In bull markets, momentum builds over time, so on shorter timeframes such as 50MA the market tends to exceed the long-term average. Short-term moving averages fall below longer-term ones (especially at high volume ) indicate that demand is drying up, and is often followed by a sharp drop or a prolonged bear market.
The reliability of the cross of death in the crypto market
Being much younger than traditional markets, the cryptocurrency market is not always subject to the same rules. We have seen over and over that the cross of death often deals a heavy blow to individual stocks and broad-based indices. In fact, for the most part, similar trends have been observed in the Bitcoin market. the indicator of the cross of death is not infallible . Bitcoin's death cross in mid-2015, albeit in a much smaller volume, was actually followed by a massive bull run.
Death crosses in later years were more reliably accompanied by bear price actions, partly due to the discovery of more accurate prices at higher volumes. It's a great indicator that should be taken seriously, but it's never an impediment, as the figure above shows, the ROI from a death cross until a gold cross occurs, which is the opposite – when the MA-50 line crosses above from the MA-200 line. This may be due to Bitcoin's youth, but a death cross has invariably been followed by massive price action of one form or another, so it's worth preparing anyway. Pure technique, there are several interesting fundamental factors at play that can push against the downward slant of the cross of death: El Salvador's adoption of Bitcoin, the completion of Taproot's signaling, the transition of miners to US renewables, and much more have the ability to mitigate (or deny) what the death cross holds for the BTC price at the end of June. According to analyst VentureFounder, historical data suggest that price drops after death crosses, when they happen, have always been "gold buying opportunities."Read too:
