Warning sirens have been sounded. As observed by one key Bitcoin (BTC) price enthusiast, the dreaded “Death Cross” has formed on the 4HR time frame of the BTC/USD technical price chart. The Death Cross is interpreted by chartists as a pointer that signals the beginning price slumps.
In the 4HR chart, the 50-day moving average has fallen below the 200-day moving average. Ironically, the X-pattern is forming when most traders are bullish, expecting October’s price action to continue as BTC prices edge higher.
What is a Death Cross?
Often, the Death Cross can happen in any stage of a typical market cycle.
$BTC just had a death cross with the 50 and 200 EMA's on the 4h chart while the majority of the market is long.
I entered short following the death cross and have orders to add at resistance (red horizontals). pic.twitter.com/5XStubKT1H
— Financial Survivalism (@Sawcruhteez) November 15, 2019
First, when prices are peaking. During this exhaustion, prices of the asset, in this case, BTC fall, forcing the short-term moving average to fall over the long-term moving average, the 200-day MA. Second, after a period sustained downtrend. Here, the uptrend is over and prices are retracing marking a climactic sell phase where asset prices drop dramatically as bears step up, forcing lower lows.
Bitcoin (BTC) Has Opposing Camps
There are lingering concerns that October’s uptick meant prices are “priced-in” in anticipation of May 2020 halving. Next year’s halving, however, has attracted different and sometimes diverging opinions.
On one end, optimists are confident that BTC prices will soar to as high as $141,000 is past trends are anything to go by. Advising this stand is the continued labeling of Bitcoin as a logarithmic asset. The prices of these tradeable assets bearing these properties are known to spike and taper with time before plateauing.
Away from price charts, there is more than what meets the eye. Bitcoin halving will lead to a reduction in issuance from 12.5 BTCs to 6.25 BTCs and assuming a constant demand, the only way up for Bitcoin would be up. Secondly, China’s U-turn is a huge boost for blockchain projects and specifically Bitcoin.
Yet on the other opposing end, there individuals and mostly no-coiners who are non-believers. Their position is based on the energy consumption requirements of Bitcoin nodes and the lack of the so-called “intrinsic value.” Because of this, they strongly believe that Bitcoin is not the future of money, not viable and over-valued, ready to slump to zero.
State of BTC
At the time of writing, BTC is steady against the USD and ETH. Adding 7 percent against the greenback in the last month, the coin is retracing. Clear support is at $8,500. Technically, any drop below this psychological mark could spur sellers at October 2019 lows.
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Source: Coin Gape