Bitcoin’s (BTC) ongoing rally in 2023 has come at a time when market conditions are still dominated by uncertainty stemming from last year’s bearish environment. With Bitcoin up nearly 40% since the start of the year, investors are still looking for clues that will likely dictate the next price move.
As the first crypto faces resistance at $23,000, TradingShot, a pseudonymous analyst at TradingView, observed Bitcoin staring at the dreaded death cross. In particular, the digital asset is nearing its first-ever one-week death cross in history, a scenario that could invalidate the ongoing bullish trendline.
“It is inevitable and will form in the next week or two at most. As a technical bearish formation, will it negatively affect the price and restore the bearish trend in the long run?” The analyst posed.
Bitcoin price analysis chart. Source: TradingView
Bitcoin’s previous attempts to hit the death cross
It is worth noting that a death cross occurs when the 50-day moving average falls below the 200-day moving average, indicating a bearish trend. Hence, TradingShot observed that historically, every time bitcoin surged over 50% after hitting the 200-day one-week moving average, that represented a BTC price bottom, apart from the January-March 2015 surge. In fact, bitcoin is opposite up about 50% from the November 2022 lows.
Consequently, in a Jan. 24 tweet, the crypto trader and analyst going by the alias Thescalpingpro noted that Bitcoin’s current move is similar to the 2015 price pump that saw BTC surge 214%. Interestingly, the rally arose shortly before a death cross was to be implemented.
Comparison of Bitcoin Rally 2015 and 2023. Source: Thescalpingpro
As Bitcoin faces a possible death cross, another crypto expert with the Twitter username Steve Courtney explained that if Bitcoin realizes the week-long death cross, indicators point to a possible one-day golden cross.
Bitcoin Death Cross and Golden Cross Chart. Source: Steve Courtney
In particular, the Death Cross technical indicator represents a significant shift in the market and could signal an extended period of decline for the world’s largest cryptocurrency.
Although the death cross comes with bearish sentiment, it is sometimes welcomed by a segment of the market as it offers an opportunity to buy the asset at discounted prices.
Bitcoin price analysis
For now, bitcoin momentum appears to have cooled towards $23,000 with minor corrections. The asset is valued at $22,599 with 24-hour losses of over 1%.
One day bitcoin price chart. Source: Finbold
From a technical analysis perspective, the daily summary of the one-day indicators is a ‘buy’ at 15, while the moving averages are a ‘strong buy’ at 13. The oscillators are neutral at 7.
Technical Bitcoin Analysis. Source: TradingView
Meanwhile, focus is on Bitcoin’s $22,500 support level. Breaking the position could mean more trouble for the crypto.
Disclaimer: The content of this website should not be construed as investment advice. Investing is speculative. When investing, your capital is at risk.
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