Traders looking at the Bitcoin (BTC) chart will see that there is a “Cross of Death Coming. This looks dangerous. Is Bitcoin heading for a sharp decline? Although the name suggests that the end is near, it turns out that BTC’s death cross is not so deadly after all. Analyst Timothy Peterson wrote this in a post on social media platform X.
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Bitcoin’s Death Crossing Is More Than a Sign of Life
Bitcoin Death Cross is a formation on the daily chart. When the 50-day Moving Average (MA) Since the 200-day moving average crosses from above, this is called a death cross. It is called this because it can be a harbinger of an upcoming decline. Furthermore, it can be an indication that the trend bullish (positive) Unpleasant bearish (negative) It has changed. It is usually widely covered in Bitcoin news when the time comes again.
But Bitcoin turns out to be a different animal. Peterson uses a chart to show what the BTC price has done in the past after a death cross. And the data shows that the death cross doesn’t look like a big deal for the crypto king:
Bitcoin is facing an imminent “death cross” as the 50-day moving average drops below the 200-day moving average. This has only happened eight times since 2015. What happens now? After 60 days, Bitcoin is up 62% of the time.
#Bitcoin The “death cross” is not very deadly.
Bitcoin is facing an imminent “death cross” as the 50-day moving average crosses below the 200-day moving average.
This has only happened 8 times since 2015.
What happens next?
After 60 days, Bitcoin was up 62% of the time. The average return was +18%. pic.twitter.com/EdTz5n5C8L– Timothy Peterson (@nsquaredvalue) August 7, 2024
In fact, the average return after a death cross is +18 percent. This really paints a different picture than what you might expect.
The previous death cross was followed by a +160% increase in Bitcoin price.
This picture is confirmed when we look at the previous death cross. This led to the formation of the Bitcoin price in September 2023. After this death cross, the price quickly turned in the other direction. What followed was an increase of more than 160 percent to the current record price of around $74,000.
Of course, this does not mean that this will happen again. As always, past results are certainly no guarantee of future performance. Bitcoin can be extremely volatile and do exactly what one would not expect. Therefore, this is not financial advice.
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