As Bitcoin continues its horizontal movements, conditions may worsen in the coming days.
According to Coindesk, FxPro's senior market analyst Alex Kuptsikevich said that Bitcoin's death cross may occur next week.
What is Death Cross?
Death-Cross: The short-term average crosses the longer-term average from top to bottom. This intersection is considered important as a sign of great weakness.
So this pattern occurs when a shorter-term moving average, such as a 50-week, falls below a longer-term moving average, such as a 200-week.
At this point, the 50-day simple moving average on Bitcoin's daily chart is on track to break below the 200-day SMA, while a possible death cross signals a bearish trend for BTC.
Speaking to Coindesk, Alex Kuptsikevich said:
“Such a pattern (death cross) on the Bitcoin chart may form next week.
Such a signal indicates further declines for BTC and highlights the bearish trend here.
However, history shows that the Bitcoin death cross is unreliable as an independent indicator.”
At this point, analysts comparing the DXY and Bitcoin charts pointed out that there is an inverse correlation between Bitcoin and DXY and stated that the 50-day SMA in DXY may rise above the 200-day SMA in the coming weeks, meaning a golden cross may occur.
Analysts added that while this situation gives a bullish signal for DXY, it strengthens the possibility of decline for risky assets such as BTC.
*This is not investment advice.
