Bitcoin and the broader cryptocurrency markets are bouncing back, rallying after encountering a concerning technical signal earlier this week.
During Friday morning’s Asian trading session, Bitcoin’s price surged to an intraday high of $62,790. This marked a significant 9.5% increase within just 12 hours, as the asset climbed from an earlier low of $57,000 late on August 8.
This recent surge means Bitcoin has recovered about 25% from its dip to $49,800 on Monday. With renewed dip-buying interest, Bitcoin is now on the path to regaining its position within its previous range-bound channel and accumulation zone.
Death Cross Avoided
On August 9, Benjamin Cowen, an analyst and founder of ITC Crypto, predicted that Bitcoin would rally into its death cross. In a post on X, he shared his insights on the market’s movement.
That prediction has now come true, and the feared bearish technical signal has been avoided for now.
Understanding the Death Cross and Bitcoin’s Response
A death cross is a technical analysis indicator where a short-term moving average, typically the 50-day, drops below a longer-term moving average, like the 200-day. This is often seen as a signal of a bearish trend reversal, but it doesn’t always play out that way.
Benjamin Cowen, founder of ITC Crypto, pointed out that in 2023, Bitcoin began its rally shortly after a death cross occurred. He noted, “Bitcoin then moved above its 50-day simple moving average (SMA) and used it as support before climbing higher.”
However, in 2022, a small rally preceded the death cross, but the momentum faded after the pattern emerged.
Cowen emphasized that for Bitcoin’s upward movement to continue, it needed to hold above the $62,000 support level. Unfortunately, Bitcoin has since dropped below that threshold.
Other analysts chimed in, noting that the first death cross isn’t a major concern; it’s the second one that can be more worrisome. They pointed out that during the 2021 bull market, there were two death crosses. The first was followed by a significant rally, but the second led to a two-year bear market.
Crypto Markets on the Rise
The overall cryptocurrency market is showing signs of recovery, with total market capitalization gaining 6% in a day, bringing it back to $2.2 trillion. However, it still needs to climb to $2.5 trillion to fully recover from this week’s losses.
While Bitcoin has been leading the charge, Ethereum is also making a strong comeback. ETH saw a 9% increase, reaching $2,700 during Asian trading before settling slightly at $2,630.
Altcoins are mostly in the green, with several experiencing double-digit gains. Notable performers include Near Protocol (NEAR), Pepe (PEPE), Stacks (STX), Bittensor (TAO), and Sui (SUI), which skyrocketed by an impressive 32%.
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