Bitcoin’s (BTC) 2023 sustained rally has emerged at a period market conditions are still dominated by uncertainty stemming from last year’s bear environment. With Bitcoin rallying by almost 40% since the start of the year, investors are still looking for hints likely to dictate the next price movement.
As the maiden crypto faces resistance at $23,000, TradingShot, a pseudonymous analyst on TradingView observed that Bitcoin is staring at the dreaded death cross. In particular, the digital asset is approaching the first-ever one-week death cross in history, a scenario that could invalidate the ongoing bullish trendline.
“It is inevitable, and it will be formed in the next or 2 weeks maximum. Being a technically bearish formation, will it affect the price negatively and restore the bearish trend long-term?” the analyst posed.
Bitcoin’s previous attempts to hit death cross
It is worth noting a death cross occurs when the 50-day moving average falls below the 200-day moving average, indicating a bearish trend. Therefore, TradingShot observed that historically, every time Bitcoin surged by over 50% after hitting the one-week 200-day moving average, it represented a BTC price bottom apart from the January to March 2015 rise. Indeed, Bitcoin is up by about 50% from the November 2022 lows.
Consequently, in a tweet on January 24, crypto trader and analyst by the pseudonym Thescalpingpro noted that Bitcoin’s current movement resembles the 2015 price pump that saw BTC rally 214%. Interestingly, the rally emerged just before a death cross was about to be realized.
Furthermore, as Bitcoin faces a possible death cross, another crypto expert by the Twitter username Steve Courtney stated if Bitcoin realizes the one-week death cross, indicators point to a possible one-day golden cross before.
Notably, the death cross technical indicator is a significant shift in the market and could signal a prolonged period of decline for the world’s largest cryptocurrency.
Although the death cross comes with a bearish sentiment, it is sometimes welcomed by a section of the market as it offers an opportunity to purchase the asset at discounted prices.
Bitcoin price analysis
At the moment, Bitcoin’s momentum toward $23,000 appears to have cooled down with minor corrections. The asset is valued at $22,599 with 24 hours losses of over 1%.
From the technical analysis perspective, the daily summary of the one-day gauges aligns with ‘buy’ at 15, while moving averages are for a ‘strong buy’ at 13. Oscillators are neutral at 7.
In the meantime, the focus turns to Bitcoin’s support level of $22,500. Breaching the position could spell more trouble for the crypto.
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