The decline of Bitcoin’s price below $58,000 has led to the formation of a ‘death cross,’ a sign of a potential new wave of selling.
#Bitcoin just printed a bearish cross on the daily chart, with the 50 MA crossing below the 200 MA, signaling short-term weakness in the market.
This is the second bearish cross since the $15,500 bottom.
The last bearish cross was in September 2023 when the price was… pic.twitter.com/WXAhSYsRbW
— Mags (@thescalpingpro) August 15, 2024
The mentioned signal occurs when the 50 DMA crosses below the 200 DMA.
According to the trader known as Mags, this is the second bearish ‘cross’ since the bottom at $15,500. The last signal appeared in September 2023 when the price was trading near $25,000.
“After this, prices moved sideways for several weeks, then returned to the MA, leading to a bullish [or golden] ‘cross’ and a strong rally upwards. If the pattern repeats, we might see prolonged intermittent ‘consolidation’ here,” noted the specialist.
According to Cointelegraph, in the past, after forming a bullish signal, the price rose by approximately ~50% over the next four months. For instance, in September 2023, prices increased from $26,578 to $39,518. In July 2021, after the appearance of a ‘golden cross,’ the rate jumped by 54% to $54,813.
Currently, to negate the bearish signal, Bitcoin needs to reclaim the 200 DMA at $62,432. This would open the possibility of testing the trend channel resistance around $70,000, according to Tony Sycamore from IG.
#Bitcoin trades lower at $57,478 on concerns the US Government is preparing to sell the Bitcoins it seized during the Silk Road raid.
It needs to reclaim the 200-day moving ma at $62,432 to stabilise and open up a test of trend channel resistance near $70k.
Aware that a… pic.twitter.com/lMCYbOzXOU
— Tony Sycamore_IG (@Tony_Sycamore) August 16, 2024
“A sustained break below the $50,000-53,000 support level would negate the bullish medium-term technical backdrop,” warned the expert.
According to Cointelegraph, the digital gold’s price is under pressure from news about the potential sale by US authorities of coins seized in the Silk Road darknet marketplace case.
On August 15, it was reported that 10,000 BTC were moved to a Coinbase Prime wallet. Another address associated with the US government still holds 19,800 BTC ($1.15 billion) related to the shadow platform case.
Back in December 2023, an appeals court officially formalized the confiscation of 69,370 BTC, which belonged to the illegal internet platform closed over 10 years ago. The funds were seized in November 2020.
In July, the US Marshals Service selected the mentioned platform to provide storage and sale services for high-capitalization cryptocurrencies.