A Deadly Accurate Cross

Bitcoin is about to trigger the Cross of Death, an amusingly-named trading indicator whereby the 50-day moving average moves below the 200-day moving average.

So why does anybody care, apart from the creepy name?

Here is a very good article explaining the real significance of the Death Cross: Double Death Cross Strategy – Deadly Accuracy Trading.

Not all crosses are created equal. At a simple mathemtical level, the cross-over happens precisely because the market is already well-below its recent high. So at that level, it really is just telling us the obvious! So why care?

This is a trading signal, and hence is only useful if it can give some information about the future. the actual price at which the Death Cross happens, compared to the current market price is therefore significant. If the market has already tanked, then this just verifies the known bearish outlook - if anything, a new rally may be closer than further down pressure.

But if the market is close to the Death Cross, then that price is most likely a significant resistance level, especially if backed up by other data. In this case, failure to breach this level adds to the bearish outlook and is often a signal for further down-side.

If we look at the BTC market, we see the Death Cross approaching within a couple of days. It is likely to take place at about $43k, while the market is currently at about $39k. This is in the same range as the important $42k level that saw both an ATH and stubborn support on the way back down.

Hence, this may be a significant signal. No signal is perfect - and sometimes can turn into a different signal - but a Cross of Death that is also a local resistance level is grim news.

The good news is that another leg down would likely be the final capitulation before a new rally. But we live in manipulated times, so just watch the show.

---

image: public domain Dance of Death (edited).

---