Bitcoin, Death Cross Appears on Weekly Chart ── Expert Opinion is Divided | coindesk JAPAN | Coindesk Japan

An ominous-sounding technical pattern has emerged for the first time on the Bitcoin (BTC) weekly chart. But analysts are divided on what that means.

Bitcoin’s 50-week Simple Moving Average (SMA) has crossed below the 200-week SMA, confirming a bearish indicator known as the ‘death cross’. The indicator is said to suggest that short-term price declines may lead to a more sustained downtrend.

Even though the death cross based on moving averages represents what happened in the past, many see it as a future-oriented indicator.

Alex Kuptsikevich, Senior Market Analyst at FxPro, said in an email, “Weekly formation death cross is cautious on the short-term outlook, moving from $18,000 to $16,300. maintains the potential for a return of

Given the crisis at crypto-focused bank Silvergate and the prospect of rising interest rates across the developed world, the recently confirmed death cross may come at the right time for the bears. .

Bitcoin fell nearly 5% last week as Silvergate said it was evaluating its ability to continue as a going concern. Major crypto assets have met selling around the 50-week SMA for the second week in a row.

“Technically, the 50-week SMA continues to act as resistance,” said Kapzykevich.

However, some observers do not see the death cross as a reliable indicator, taking it for granted during price declines as it is based on historical moving averages. Moreover, it has proven to be a contrarian indicator in the stock market.

“A death cross is not an event. A weekly death cross means that the 50-week SMA has fallen below the 200-week SMA. It is, by definition, a lagging indicator that occurs after a sharp drop,” says Kane Island. Timothy Peterson, investment manager at Cane Island Alternative Investments, said last month:is tweeting.

According to Peterson, Deathcross is not a reliable single indicator in traditional markets.

“In the S&P 500 going back nearly 100 years, there have been nine such events: 1938, 1948, 1958, 1963, 1970, 1974, 1978, 2001, 2008.” Within days, the average gain was 22% and the average loss was -9%.Within 200 days, the average gain was 46% and the average loss was -11%.These are excellent risk/return probabilities,” said Peter. Mr Song said.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Shutterstock
｜Original: Does Bitcoin’s Weekly Death Cross Pattern Call for Caution?