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Saturday, August 13, 2022

Bitcoin Price Eyeing A Further Drop To $35K

Bitcoin did manage to form quite a trading pattern on the 8th of January, which has been watched widely by traditional chartists to avoid further losses. In detail, the 50-day exponential average of the cryptocurrency did manage to fall below its 200-day exponential moving average, which would then form a so-called death cross. This pattern emerged as the cryptocurrency went through a pretty rough ride in the last couple of months, as it fell by around 40% from its record high of $69,000. 

Bitcoin’s Death Cross Could Get Dangerous

It has been recorded that most of the previous death crosses in history have been quite insignificant to Bitcoin over the last couple of years. For instance, any 50 or 200 days EMA bearish crossover in March 2020 did appear after the price of BTC had gone from a sum of $9,000 to under $4,000, which turned out to be lagging more than was predicted. Additionally, one could also vouch that the occurrence did pretty little in preventing the cryptocurrency from getting to a sum of $29,000 by the end of 2020. 

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Interestingly, a similar death cross did appear on the daily charts of Bitcoin all the way back in July 2021, like it did in March 2020- which was less predictive and more lagging. The occurrence did not really lead to any massive selloff. Instead, the price of BTC merely went on to consolidate sideways before it started rallying to a price of $69,000 by the 21st of November.

But as it has been recorded, the bearish moving average crossovers in both of the instances, as mentioned above, did accompany quite a piece of good news, which could have limited the main impact as displayed on the market for Bitcoin. 

The latest decline in Bitcoin does reflect major growing investor concern about the decision of the Feds to aggressively unwind its pretty loose monetary policies- which would include rewinding its $120 billion a month asset purchasing program.

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