BITCOIN 1D Death Cross formed and its ugly! How bad can it be?

11 ก.ย. 2023

Bitcoin (BTCUSD) couldn't avoid the Death Cross formation on the 1D time-frame as a result of August's decline. This is technically a bearish pattern, where the 1D MA50 (blue trend-line) crosses below the 1D MA200 (orange trend-line). So how bad can it be?

To answer that, we can look into the historic price action of course through past occurrences of the Death Cross pattern. On this analysis you see the last five (5) crosses (included the current one). Let's look into them with more detail one by one:

a) September 2023 (current)
The Death Cross was formed while the price is still above the 1W MA50 (red trend-line), which is supporting since March 13 2023 (6 months).
At the same time, the 1D LMACD hit -0.03 and is rebounding following a Bullish Cross.

b) January 2022 (Bear Cycle)
The Death Cross was formed while the price had already dipped below the 1W MA50, indicating the confirmed transition to the Bear Cycle.
The 1D LMACD was already declining after a pre Death Cross hit at -0.06.

c) October 2019 & March 2020 (Bull Cycle)
The 2019 Death Cross was formed while the price was above the 1W MA50, but eventually hit it. The 1D LMACD was rising on a Bullish Cross after a pre Death Cross hit at -0.06.
The 2020 Death Cross was formed while the price was below the 1W MA50 and after the actual bottom. This was due to the COVID global asset wide market flash crash, which of course was an irregularity, a Black Swan event that can't offer any meaningful conclusions to our current analysis.

d) September 2015 (start of Bull Cycle)
The Death Cross was formed while the price was below the 1W MA50 (which was still unbroken throughout the Bear Cycle) and after the actual bottom. This was due to the Bitfinex flash crash. That was the actual bottom of the Bear Cycle and the start of the new Bull Cycle, which was confirmed by the breaking of the 1W MA50. The 1D LMACD was rising on a Bullish Cross after a pre Death Cross hit at -0.06.

** Conclusion **
This is a mix of results but we can agree that the key here will be the 1W MA50. As long as the price holds it or even at the event of a marginal break, rebounds immediately, BTC most likely avoids a new Bear Cycle. If not, then the price action in the following weeks/ months will most likely draw more comparisons with the January 2022 Death Cross.

So what do you think? How bad do you feel this Death Cross pattern is? Feel free to let us know in the comments section below!

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