Bitcoin has recently confirmed a death cross on its price chart, a technical indicator that may signal the onset of a bear market. This development follows a price drop to $80,000 on Friday, marking a pivotal moment for the cryptocurrency. Historically, such death crosses have been precursors to substantial declines in BTC price, with previous occurrences leading to declines ranging from 64% to 77%.
The closing of the BTC/USD pair below its 50-week moving average has raised concerns among analysts. Rekt Capital, a notable cryptocurrency analyst, indicated that a failure to reclaim this level quickly could complicate Bitcoin”s ability to maintain a bullish market structure. The analyst noted, “If the Weekly Close indeed occurs below the 50 EMA, price will need to try reclaim it promptly on a relief rally to protect the structure.”
As Bitcoin dropped below significant support levels, including the 100-week moving average, it reached a six-month low of $80,500. The confirmation of a death cross on the daily chart occurred as the 50-day simple moving average crossed below the 200-day simple moving average, a bearish signal that has historically foreshadowed significant price declines. Previous cycles saw similar patterns, with substantial drops following each death cross.
On November 16, Bitcoin”s 50-day SMA crossing below the 200-day SMA marked the first death cross since January 2024. This has prompted analysts like Mister Crypto to reflect on the cyclical nature of Bitcoin”s price movements, suggesting that every cycle has concluded with a death cross.
Moreover, the SuperTrend indicator has also indicated a bearish signal on the weekly chart, further reinforcing the notion that a bear market may be underway. As selling pressure mounts, the volume of realized losses for Bitcoin holders has surged to levels not seen since the aftermath of the FTX collapse, exceeding $800 million on a seven-day rolling basis, as reported by on-chain data provider Glassnode.
According to Glassnode, the realized losses have been predominantly driven by short-term holders, who are capitulating their positions at a loss. These dynamics are echoed by CryptoQuant analyst IT Tech, who noted that short-term selling typically signals a potential local bottom if prices can quickly reclaim their cost basis. However, the ongoing panic selling by these holders is contributing to predictions that Bitcoin”s price could continue its downward trajectory toward the April bottom of $74,500.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making decisions.
