A death cross has already happened in Bitcoin price charts, signaling to investors that the asset may be entering an extended downtrend. But a sudden powerful move has caused Bitcoin to reclaim one of the important moving averages that had previously crossed below.
However, a more dangerous death cross could be on the horizon, if Bitcoin is unable to maintain the bullish momentum stemming from the news that China is in support of the blockchain technology the crypto asset was built on.
Bitcoin Reclaims Critical 200-Day Moving Average
During the last bull run, Bitcoin was supported the entire way up to its all-time high of $20,000 by the 200-day moving average. Each time Bitcoin corrected, the important long-term moving average acted as support and a launchpad to push Bitcoin higher.
This time around, though, the 200-day moving average was lost to bears during a recent push downward. Bitcoin closed multiple daily candles and even weekly candles below the important indicator.
But at the end of last week, news broke that Chinese President Xi Jinping spoke in support of blockchain technology, causing crypto prices to surge across the board – and in particular Bitcoin and Chinese altcoins.
— CryptoHamster (@CryptoHamsterIO) October 30, 2019
The powerful spike in price took Bitcoin to a high of $10,500 from $7,400, setting its third-highest gain in a single day in its history. It was also enough to reclaim the 200-day moving average, however, it may not have been enough to prevent more downside in the days ahead.
Weekly Death Cross Far More Significant Than Daily Death Cross
As noted, a death cross occurs when a short-term moving average falls below a long-term moving average. The recent death cross was of the 200-day moving average and the 50-day moving average. However, the 100-week moving average has started to fall as well, and if it crosses below the 50-week moving average, it could spell doom for Bitcoin and crypto investors.
— fil₿fil₿ (@filbfilb) October 30, 2019
A prominent crypto analyst warns that the death cross of the 100-week moving average and 50-week moving average is “far more significant” and could happen toward the end of November or beginning of December if Bitcoin isn’t able to sustain support at current prices. A push even higher may be needed at this point to prevent such an ominous death cross from occurring.
Related Reading | Crypto Trader: Bitcoin Price May Not Break All-Time High Until 2024
With a death cross both on daily and weekly moving averages, not only could any chance of a new Bitcoin bull run be ruined, the leading crypto by market cap could be at risk of entering an extended bear market, with even more downside in the coming months.
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