Bitcoin Nears Death Cross That Preceded Final Bear Market Legs
An analyst has identified how Bitcoin might be approaching a loss of life cross between the 50-day and 200-day SMAs on the 3-day chart.
Bitcoin Is Potentially Nearing A Death Cross On The 3-Day Timeframe
In a brand new post on X, analyst Ali Martinez has talked a couple of loss of life cross on Bitcoin’s 3-day worth chart. A “death cross” popularly refers to a bearish sign produced by a crossover between two simple moving averages (SMAs) of an asset. Typically, a loss of life cross entails the longer SMA transferring above the shorter one. In the context of the present matter, the SMAs of relevance are the 50-day and 200-day variations.
Below is the chart shared by Martinez that reveals the sample displayed by these two SMAs for the 3-day Bitcoin worth.
As is seen within the graph, the 50-day SMA of the 3-day Bitcoin worth noticed a cross below the 200-day SMA in every of the final three cycles. All of those crossovers preceded bearish worth motion.
More particularly, the 2014 crossover led to a drawdown of 52.19% for the asset, the 2018 one to 50.56%, and the 2022 one to 45.91%. Interestingly, these worth declines all led to the bottoms of their respective bear markets. “Since 2014, the loss of life cross between the 50 and 200 easy transferring averages on the 3-day chart has constantly preceded the ultimate leg down of a Bitcoin $BTC bear market,” famous the analyst.
Jumping to the current, BTC has confronted a bearish shift in current months with a notable drawdown in its worth. This has resulted within the 50-day SMA witnessing a decline towards the 200-day SMA. As a zoomed-in chart shared by Martinez in one other X post reveals, there may be not a lot distance left between the 50-day and 200-day SMAs of the 3-day Bitcoin worth.
If the 2 traces proceed to observe the present trajectories, the analyst has estimated {that a} loss of life cross might happen on February twenty seventh. Given the previous development, such a loss of life cross might take Bitcoin into its last leg for the bear market. It solely stays to be seen, nonetheless, whether or not the present cycle will really observe an identical sample or if it should present divergence.
In another information, the Realized Profit/Loss Ratio has slipped into the loss area lately, as on-chain analytics agency Glassnode has highlighted in an X post.
In the previous, a shift towards loss realization on the Bitcoin community has usually lasted for over six months earlier than a return of liquidity has occurred.
BTC Price
Bitcoin has erased a few of its current restoration over the previous couple of days as its worth is now buying and selling round $63,300.