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Daily death cross approaches as Bitcoin loses momentum above $8,000

Oliver Knight

Bitcoin is edging towards an exponential moving average death cross on the daily chart, which would almost certainly signal an extended correction to the downside.

The 50 EMA is sloping dangerously towards the 200 EMA for the first time since it crossed to the upside on April 26.

There have been two death crosses on the daily chart since 2014, the first of which resulted in a 70% decline in price over the following five months, while the second came during 2018’s bear market, ending in a 64% move to the downside over the next eight months.

For the death cross to come into fruition price would need to stay between $7,800 and $8,600 for the next week, although a breakout above $8,800 would invalidate a potential cross.

Aside from the looming possibility of another move to the downside, Bitcoin volume has also dropped off significantly since the break down in price on September 24. This indicates that volume may be coiling up for a volatile move in the coming weeks after a period of consolidation.

Downside targets remain at $7,400 and $6,750, although the $5,900 level of support will likely be tested as it provided a stern platform throughout the 2018 bear market.

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