Bitcoin and other cryptocurrencies made gains on Thursday, but the outlook for prices turned gloomy as the largest digital asset formed a “death cross,” a technical indicator that suggests potential selling pressure in the market.
Over the past 24 hours, the price of Bitcoin has risen by 1%, reaching a point just below $26,300. This rebound follows a recent selloff that drove prices down to $25,000 earlier this week, marking the lowest levels since mid-June. Despite the recovery, Bitcoin is still hovering around the $26,000 mark, which has acted as a strong support level throughout the past month. This comes during a period of historically low activity in digital asset trading, with both volumes and volatility reaching multi-year lows.
According to Alex Kuptsikevich, an analyst at broker FxPro, “Bitcoin may continue its rise towards $26,400. However, the key question is whether this will trigger a further selloff.” He adds, “On the daily timeframe, we have witnessed the formation of a death cross, which suggests that traders who focus on long-term technical analysis will be searching for selling opportunities on any upside movements.”
Despite the recent gains, the presence of the death cross indicates a potentially bearish outlook for Bitcoin’s price. Traders will closely monitor this situation to determine whether the selling pressure intensifies in the coming days.
The Darkening Market for Cryptos
Cryptocurrencies have recently experienced a surge in value, mirroring the rise of the stock market. However, amidst this upward trend, there is a growing sense of unease within the digital asset market, as Bitcoin continues to struggle at low levels. In fact, a troubling sign known as a “death cross” has emerged for the first time since January 2022, adding to the concern.
The term “death cross” carries significant weight in the world of finance, as it serves as a key technical indicator, often signaling a prevailing downtrend in prices or a shift towards bearish sentiment. It occurs when the 50-day moving average for prices falls below the 200-day moving average.
According to Antoni Trenchev, founder and managing partner at crypto lender Nexo, there have been nine instances of Bitcoin death crosses since 2011. The outcome following this indicator remains uncertain, with a near 50-50 chance of Bitcoin prices being lower in three, six, or twelve months. However, what is clear is that it signifies a bearish shift in momentum. Trenchev added, “It confirms what many are thinking: It’s going to be a hard slog for Bitcoin in the coming months.”
The year 2022 began with Bitcoin trading above $47,000 but ultimately witnessed a sharp decline of over 65% by November, reaching its lowest point.
Despite the recent correlation between crypto and traditional markets, the prevailing darkness surrounding Bitcoin’s future cannot be ignored. The death cross serves as a stark reminder that the road ahead may be challenging for the world’s most popular cryptocurrency.
Cryptocurrency Update
Bitcoin Surges as Ether and Memecoins Stabilize
Bitcoin, the leading cryptocurrency, experienced a significant surge in value, gaining 3.2% and reaching a price of $48,500. This upward trend was also reflected in Ether, the second-largest cryptocurrency, which saw a modest rise of 1.5%, reaching a value of $1,620.
While Bitcoin and Ether displayed positive momentum, other cryptocurrencies had a more subdued performance. Cardano and Polygon, in particular, traded just below levels seen in the previous trading session.
In the realm of memecoins, we observed a mixed bag of results. Dogecoin, one of the most popular memecoins, made a slight advancement of less than 1%. Conversely, Shiba Inu experienced a minor decline of less than 1%.
These recent developments demonstrate the dynamic nature of the cryptocurrency market, with various digital assets experiencing contrasting movements.
For more updates and insights on the world of cryptocurrency, stay tuned.