Bitcoin critical indicator prints ‘bearish cross’ as it sinks below $58K

Ciaran Lyons5 hours agoBitcoin critical indicator prints ‘bearish cross’ as it sinks below $58KThe crossing of the indicator on two different timeframes has signaled to traders that short-term performance may be weakening, sparking fear in the market.2907 Total views14 Total sharesListen to article 0:00Markets NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onA key Bitcoin indicator is raising new alarm bells among crypto traders, with a “bearish cross” signaling that the asset may be headed for further decline — though history suggests this could actually be a good sign. 

“Bitcoin just printed a bearish cross on the daily chart,” pseudonymous crypto trader Mags wrote in an Aug. 15 X post.

Mags was referring to the “death cross,” a bearish signal that occurs when the 50-day simple moving average (SMA) of the Bitcoin (BTC) price falls below the 200-day SMA.

On Aug. 15, Bitcoin’s 50-day SMA was $61,749, while its 200-day SMA stood at $62,485, according to BuyBitcoinWorldwide data.

At the time of publication, Bitcoin’s price is below the key level for traders, at $58,077, according to CoinMarketCap.Bitcoin is down 10.17% over the past 30 days. Source: CoinMarketCap

Mags explained that the move signals “short-term weakness in the market.” Traders closely watch this cross to gauge Bitcoin’s recent strength compared to its broader performance.

“It needs to reclaim the 200-day moving MA at $62,432 to stabilize and open up a test of trend channel resistance near $70k,” IG market analyst Tony Sycamore added.It could also mean a strong reversal is on the way

However, the death cross may actually be a good sign, says Mags. 

When this has happened in the past, Bitcoin’s price rallied about 50% four months later on both occasions.

In September 2023, the Bitcoin 50-day SMA fell below the 200-day SMA when its price was trading at $26,578. Just four months later, its price increased 49% to $39,518.

In July 2021, the 50-day SMA was $34,671 compared to the 200-day SMA at $44,680. Similarly, just four months after the cross, Bitcoin’s price jumped 54% to $54,813.

“The bullish confirmation will be a reclaim of the MA"s followed by a nice bullish cross,” Mags added.

Related:Bitcoin price may need 3 months to copy gold bull run — Analyst

However, Mags pointed out that “if the pattern repeats, we might see a few weeks of choppy PA here.”

It comes after Cointelegraph recently reported that the United States government transferred nearly $600 million worth of Bitcoin to Coinbase, but it is unlikely to transform into selling pressure.

Ryan Lee, chief analyst of Bitget Research told Cointelegraph that this doesn’t mean 10,000 Bitcoin have been sold yet, noting that the US Marshals Service recently teamed up with Coinbase Prime to handle and trade large digital assets.

Magazine:How Chinese traders and miners get around China’s crypto ban

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Bitcoin Price# Bitcoin Analysis# Adoption# MarketsAdd reaction