Bitcoin has been moving in the mid and high range of $30,000. At the time of writing, the first cryptocurrency by market cap trades at $37,347 with 2.8% profits in the daily chart with moderate losses in higher timeframes.
BTC’s price was rejected at $38,000. This level has become a key resistance and must be overcome if the recovery is to be successful. Anonymous analyst Rekt Capital believes that there could be further downside in the coming weeks, as BTC’s price action hints at the formation of a “Death Cross”.
This indicator appears when BTC’s price 50 Exponential Moving Average (EMA) cross below the 200 Exponential Moving Average (EMA). They are the opposite of the “Golden Cross”, this indicator points to appreciation and is a signal that the bulls will retake the offensive.
With a “Death Cross”, as the analyst said, usually there is a wide period of downside for BTC’s price. During the 2013 bull run, it took 135 days or around 4 months for Bitcoin to form this indicator. In the meantime, the price dropped 73%. Rekt Capital said:
The Death Cross occurs with some lag So by the time it happens – a lot of downside will have already happened. That said, the Death Cross confirms a bearish trend and precedes even more downside. And in 2013, the Death Cross preceded an additional -71% drop…
Is Bitcoin Bear Market Imminent?
Therefore, BTC’s price could continue to drop in the short term. This has historically occurred many times over during 2013, 2017, and 2019 and has coincided with local tops. The formation of this indicator has an average duration of 107 to 149 days.
If the analyst is correct, the “Death Cross” should occur during late July and early September of the current year, as seen in the chart below. A third scenario places the formation of this indicator for the current month, Rekt Capital said:
Right now, the 50 EMA (blue) and 200 EMA (black) are converging rapidly towards one another. If BTC doesn’t increase in its price soon and the EMAs continue at the same current pace… The Death Cross could happen sooner in mid-June 2021 (blue)
On average, during a “Death Cross” event, the price dropped by around 60%. This is why Rekt Capital concludes that the 54% crash in BTC’s price is part of the pre-Death Cross period. If the theory holds, BTC’s price could see further downside to around $18,000.
At the same time, this scenario could be the most profitable for investors that seize the moment.
What’s interesting about the scenario of a -55% post-Death Cross crash however is that it would result in a $18000 BTC. Which ties in with the 200-Week EMA (black) which tends to offer fantastic opportunities with outsized ROI for #BTC investors (green boxes highlight this)
from NewsBTC https://ift.tt/3wQWWdw
