Bitcoin eyes ‘Death Cross’
Crypto Inferno
TL;DR We’re approaching a crossover of the 50-day moving average and 200-day moving average. Expert analysts call that a ‘Death Cross’ and expect a heavy fall in price over the coming weeks. We’re not so sure.
Despite yesterday’s $1,000 rally, bitcoin is still well down from its December high. Whilst there are some indications that the worst is over, a handful of analysts are saying there’s still a long way left to drop. ‘There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017,’ comments Paul Day, head of futures and options and a technical analyst for Market Securities Dubai Ltd.
Day has gone on record as predicting a fall for bitcoin down to $2,800, based on current technicals – just 14% of the price at its all-time high. Whilst that wouldn’t be unprecedented for bitcoin (about the same happened after the 2013 bubble), we’re wondering how likely that will be.
The ‘Death Cross’ that many traders are looking for is the point at which the 50-period moving average on the daily chart crosses the 200 MA. That will happen if bitcoin stays below $9,000 or so for another week or so.
But while bitcoin has attracted an increasing number of ‘professional’ traders, it’s hard to believe that a lot of people trade it on those timescales. Bitcoin traders are either day-traders/swing traders, or they buy and HODL. Trading on the kind of timeframe that Day is talking about seems like the worst of both worlds. Anyone who uses 200/50 MAs as a signal has already lost 60% of their profit opportunity, and the indicators lag so much that they will also miss the best point to buy back in.
Here’s our best guess for how this will all pan out: http://telegra.ph/Inferno-market-outlook-The-Double-Bubble-Analysis-03-16 To read about Day’s Death Cross, visit https://www.bloomberg.com/news/articles/2018-03-16/bitcoin-s-death-cross-looms-as-strategist-eyes-2-800-level
------------------------
Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.
Join us on Telegram