It sounds ominous, but it really isn't.
Bitcoin is about to experience a Death Cross, which is where the 50 day moving average crosses the 200 day moving average to the down side.
(Source: https://www.coindesk.com/why-bitcoins-death-cross-may-become-a-bear-trap/)
Before you get too caught up in the name though, it really just means that a shorter term moving average has crossed a longer term moving average to the downside.
Which sometimes could signal lower lows, in terms of price, are yet to come.
However, is the Death Cross really that great of a technical indicator?
In one word, no.
In fact, I find the death cross to be more of a contrarian indicator as opposed to a leading one.
This was something I noticed back in my stock trading days as all kinds of headlines would come out about how a certain stock just had a death cross and was now doomed to go much lower.
Except right about that time as all those headlines were coming out, the price would tend to reverse and that would end up being the low.
Will something similar happen with bitcoin?
Well to make some educated guesses, lets take a look at a couple other times when a death cross has happened.
In the chart seen below, there have been 3 death crosses from 2014-215:
(Source: https://www.coindesk.com/why-bitcoins-death-cross-may-become-a-bear-trap/)
In all 3 of them the price made at least a short term bottom right about the same time the death cross was confirmed.
Then in 2 of the 3 scenarios, it turned out to be a longer term bottom and prices trended significantly higher from there.
Which means...
In this current scenario, and judging by recent history, we should except bitcoin to bounce significantly off of those lows whenever this death cross is confirmed at the very least.
If not put in a longer term bottom and outright change the trend.
So, next time you hear the term Death Cross, do not be afraid.
Instead look at it as a sign that prices are very likely to start moving in the other direction "soon".
Stay informed my friends.
