Will this time be different? Bitcoin eyes drop to $35K as BTC price paints ‘death cross’

Bitcoin
(BTC)
formed
a
trading
pattern
on
Jan.
8
that
is
widely
watched
by
traditional
chartists
for
its
ability
to
anticipate
further
losses.

In
detail,
the
cryptocurrency’s
50-day
exponential
moving
average
(50-day
EMA)
fell
below
its
200-day
exponential
moving
average
(200-day
EMA),
forming
a
so-called
“death
cross.”
The
pattern
appeared
as
Bitcoin
underwent
a
rough
ride
in
the
previous
two
months,
falling
over
40%
from
its
record
high
of
$69,000.


BTC/USD
daily
price
chart.
Source:
TradingView

Death
cross
history

Previous
death
crosses
were
insignificant
to
Bitcoin
over
the
past
two
years.
For
instance,
a
50-200-day
EMA
bearish
crossover
in
March
2020
appeared
after
the

BTC
price
had
fallen
from
nearly
$9,000
to
below
$4,000
,
turning
out
to
be
lagging
than
predictive.

Additionally,
its
occurrence
did
little
in
preventing
Bitcoin
from
rising
to
around
$29,000
by
the
end
of
2020,
as
shown
in
the
chart
below


BTC/USD
daily
price
chart
featuring
March
2020
death
cross.
Source:
TradingView

Similarly,
a
death
cross
appeared
on
the
Bitcoin
daily
charts
in
July
2021
that

like
in
March
2020

was
more
lagging
and
less
predictive.
Its
occurrence
did
not
lead
to
a
massive
selloff.
Instead,
BTC’s
price
merely
consolidated
sideways
before

rallying
to
$69,000

by
November
2021.


BTC/USD
daily
price
chart
featuring
death
cross.
Source:
TradingView

But
the
bearish
moving
average
crossovers
in
both
the
instances,
as
mentioned
above,
accompanied
a
piece
of
good
news,
which
may
have
limited
their
impact
on
the
Bitcoin
market.

For
instance,
the
Bitcoin
price
recovery
in
July
2021
came
majorly
in
the
wake
of
rumors
that
Amazon
would
start
accepting
cryptocurrencies
for
payments

that
later
turned
out
to
be
false

and
following
a
conference,
dubbed
The
B-Word
,”
which
saw
Twitter
CEO
Jack
Dorsey,
Tesla
CEO
Elon
Musk,
and
ARK
Invest
CEO
Cathie
Wood
speaking
highly
in
favor
of
Bitcoin.

Similarly,
Bitcoin
recovered
sharply
from
its
below
$4,000-levels
in
March
2020,
primarily
after
the
U.S.
Federal
Reserve

announced
its
loose
monetary
policies

to
contain
the
aftermath
of
the
coronavirus
pandemic-led
stock
market
crash.

The
death
cross
this
time
looks
dangerous

Bitcoin’s
latest
decline
reflected
growing
investor
concern
about
the
Fed’s

decision

to
aggressively
unwind
its
loose
monetary
policies—including
the
dialing
back
of
its
$120
billion
a
month
asset
purchasing
program
followed
by
three
rate
hikes—in
2022.

Typically,
rising
interest
rates
make
holding

volatile
assets
like
Bitcoin

less
appealing
than
government
bonds,
which
offer
guaranteed
yields.

“This
is
proof
that
bitcoin
acts
like
a
risk
asset,”
Noelle
Acheson,
head
of
market
insights
at
crypto
lender
Genesis
Global
Trading,

told
the
Wall
Street
Journal
,
adding
that
the
short-term
holders
would
be
the
“closest
to
the
exit.”



Related: Bitcoin
may
pass
$30K
September
lows,
trader
warns

As
a
result,
the
overall
reduction
in
cash
liquidity,
coupled
with
the
death
cross
formation,
could
trigger
further
selloffs
in
the
Bitcoin
market.
However,
that
is
unless
the
BTC
price
rebounds
from
its
current
support
level
around
$40,000,
the
0.382
Fib
line 
shown
in
the
chart
below.


BTC/USD
daily
price
chart
featuring
Fib
retracement
levels.
Source:
TradingView 

Nonetheless,
a
break
below
$40,000
may
risk
sending
the
Bitcoin
price
to
the
next
Fib
line
support
near
$35,000.  

The
views
and
opinions
expressed
here
are
solely
those
of
the
author
and
do
not
necessarily
reflect
the
views
of
Cointelegraph.com.
Every
investment
and
trading
move
involves
risk,
you
should
conduct
your
own
research
when
making
a
decision.

read original article here