Bitcoin plummeted from $36,040 at 10.45pm last night to $34,935 at 5am, a sharp 3 percent drop. Ethereum fell from $2,415 to $2,315 from 1.05am to 7.05am, a 4.2 percent drop. And overnight dogecoin fell from 0.317 to 0.308, a 2.8 percent drop.
George from Cryptosrus has described the death cross as a “lagging indicator” of market movements from the preceding weeks and months.
The cryptocurrency expert said that if the death-cross does happen “it does not mean that bitcoin is going to nose-dive, because most of the pain may have already occurred”.
“We are halfway off from the previous bitcoin all-time-high.
“Now we are getting ready to move up just like in March 2020.”
He explained that the charts suggest conditions that are very similar to March 2020 when bitcoin prices experienced a steady uptrend.
Many experts are now suggesting that signals of an “impending” death-cross could be a “contrarian buy signal”.
A death cross is interpreted from measurements of the moving price averages over either 50 or 200 days.
These “lagging indicators” show averages of what happened, but do not suggest what will happen in the future.
Experts regard a death cross as a “contrarian play”.
Many experts are pointing to the last death cross that occurred on March 26, 2020 as displaying a “contrarian buy signal”.
The most recent death cross was on March 26, 2020, when bitcoin to dollar prices pair closed at $6,758.18.
However, the March 2020 death cross, in retrospect, turned out to be a contrarian buy signal, as bitcoin to dollar rates had already hit a bottom weeks before, at a price of $3,858 per bitcoin.
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Bitcoin then went on to climb steadily from $6,758.18 to an all-time high of $64,900 on 13 April 2021.
Speaking about the death-cross comparisons, Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, said in a research note published on Wednesday: “Our graphic depicts bitcoin at the steepest discount to its 20-week moving average since the March 2020 bottom around $4,000.
“A more enduring discount at the end of 2018 marked the low closer to $3,000.
He added that this could be an indicator for bulls to invest in the market.
He added: “Calls for $20,000 and technical patterns such as ‘death crosses’ are often triggers for the more fundamentally focused and longer-term bulls to be responsive buyers,”