Bitcoin Faces Potential 25% Drop as 'Death Cross' Looms
1min read Cryptocurrency analyst Benjamin cowen has issued a warning about a potential significant decline in Bitcoin's value, highlighting a technical signal known as a 'death cross.' This pattern occurs when an asset's 50-day moving average crosses below its 200-day moving average, indicating a bearish trend. Cowen predicts that this event could happen within the next one to two weeks if current market conditions persist.
Cowen's analysis suggests that a sell-off could precede the 'death cross,' making the period leading up to it particularly volatile. He points out that historical data from 2019 and 2021 show that a 'death cross' has foreshadowed corrections in Bitcoin's price. According to Cowen, the low point around the time of the 'death cross' could provide insights into the next rally's potential, whether it reaches a new high or just a lower high.
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If Bitcoin's price drops below $70,000, Cowen believes it could indicate a break in the market structure, preventing it from rising above the current all-time high of around $109,000. Specifically, if the price falls into the low $60,000s, particularly around $63,000, it would be challenging to ignore the bearish signal. Conversely, if Bitcoin finds a local bottom above $70,000 and holds above $73,000, it would suggest that the market structure remains intact, potentially avoiding a more severe correction.
Cowen's outlook serves as a cautionary note for investors, highlighting the potential risks and volatility in the cryptocurrency market. While the 'death cross' is not a definitive indicator of future performance, it is a widely recognized technical signal that investors should be aware of. Cowen's analysis is based on historical data and chart patterns, and his forecast suggests that investors should be prepared for a potential downturn in Bitcoin's value. At the time of writing, Bitcoin is trading at $85,052.
