After the price of Bitcoin fell from the all-time high of $69k, it has been unable to recover. The price has since been stuck under $50k as the breakout seems to get rejected time and again. And this has pushed down the 20-day EMA almost near the 200-day EMA. In case the 20-day EMA cuts 200-day EMA from the top, then the Bitcoin death cross will happen again. So, it could create a negative market sentiment, which could further extend this correction.
Bitcoin death cross needs to be watched out for
The last time the death cross happened after the market crash in May, we made a low of $28.k. I am not saying that we will move back to $30k again, but it is a possibility not completely off the cards. More importantly, the point is that the correction could continue, and we might be looking at $40k-$42k as an important level. This has even happened in earlier bull runs when the price crashed to $4000 from $8000 after the death cross happened.
The death cross is a clear example of a temporary bear market as the price of Bitcoin goes below the long-term price averages. Combined with the current regulatory landscape, all this could be a big problem for Bitcoin. Russia has been looking to ban cryptocurrencies, as suggested by the Bank of Russia governor. And then we have India when the regulatory approach is very unclear. So, if the timings are wrong, then the market could just collapse.
What should you do?
As an investor in the crypto space, it is important to be prepared for any types of crashes that might be ahead. These are the opportunities you would not want to miss. My take would be to keep funds ready on whatever platform you use and make sure to DCA your holdings whenever you see an opportunity. Do note that this is not financial advice but I guess most of us know that the best way to invest is to dollar cost average.
Don’t Panic and just HODL! If you are thinking about timing the market, I don’t think it would be a good choice. So, what are your thoughts on the Bitcoin death cross? And do you think we will stay above $40k if a crash happens? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
