Bitcoin Sees Historic Death Cross On 3-Day Chart — What Does This Mean?

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Market analyst Ali Martinez highlights a recent development on the Bitcoin 3-day chart with significant bearish implications. The leading cryptocurrency still trades just below the $70,000 mark following the temporary breakout earlier this week. Bitcoin has now spent an overwhelming majority of the last month within the $60,000 – $70,000 price range, after prices crashed to a new market low in late January/early February amid the extended bearish season.

Bitcoin Set For Another Leg Down?

In an X post on March 6, Martinez shares a key macro insight on the Bitcoin price trajectory, using historical data from the 3-day trading chart. The seasoned analyst explains that the formation of a particular death cross has consistently preceded the final price drawdown in the market cycle. Generally, the death cross represents a bearish technical indicator where a short-term moving average falls below the long-term moving average, indicating that recent price momentum has weakened relative to the longer-term trend, and there is rising selling pressure coupled with a potential prolonged downturn.

The common version of the death cross appears when the 50-day moving average crosses below the 200-day moving average, and is a key bearish indicator in the Bitcoin market, according to observations shared by Martinez. In 2013, Bitcoin had notably crashed by 72% before the 50/200 SMA death cross appeared. Thereafter, the market leader recorded an additional 52% price fall, before reaching a price bottom.
A similar pattern is observed in 2017, when Bitcoin declined by 67% from its market peak before the appearance of the death cross, which triggers an additional 50% crash. For the last market cycle, the 50/200 SMA death cross appeared in May 2022, when Bitcoin was prominently down by 58% from its cycle top. Thereafter, BTC investors would experience another 46% devaluation.

According to data from CoinMarketCap, Bitcoin is presently down by 45.62% from the present cycle high of $126,100 following an extended bearish phase that has lasted since October. Notably, price movement has also minted another death cross on the 3-day chart, indicating a potential major downside could occur based on precedents. In this case, Bitcoin may fall by an additional average 49% to establish a potential bottom around $33,500. However, Martinez warns that this price setup provides no bearish guarantee, but only historical alignment with macro bottom formations.

Bitcoin Price Overview

At the time of writing, Bitcoin trades at $68,235 following a 4.21% decline in the last 24 hours. Following recent positive price action, the maiden cryptocurrency is up by 3.59% on its weekly chart. However, Bitcoin remains far off a bullish turnaround as indicated by current losses of 4.49% on the monthly chart.
source: https://www.tradingview.com/news/newsbtc:27f527a35094b:0-bitcoin-sees-historic-death-cross-on-3-day-chart-what-does-this-mean/