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The death cross is a phenomenon when the 50 days moving average for an asset class is lower than the preceding 200 days moving average. Those who are only getting started on crypto trading should know that moving average is the staking of trends or subsets throughout a specified period. These moving averages can be based on several indices or market indicators. However, in the case of Bitcoin, the MA is mostly focused on its price mark.
It has been 12 years since the Beacon coin has been introduced as a stock alternative. It is important to know that cryptocurrencies do not always follow the rules that are applicable on the stock markets. According to many analyst services like trading view, it can be seen that by the end of June, a drop in the short-term MA is expected for Bitcoin. This event has been dubbed the 2021 death cross for Bitcoin.
Historical Data of Bitcoin Death Crosses Show that the Market can Shift Gears and Trigger a New Bull Run
A pseudonymous crypto analyst staked the market response after the death cross incidents in the previous years. It can be noticed that the crypto space can be a wild card and move in different ways than the stock market indices. In 2015, the Bitcoin death cross was transformed into a golden cross. The price was not only improved, but it moved up as much as 90%.
The current condition of the markets seems to be dictating that some favorable events have been happening to redirect the tailwinds of favor for beacon coin. On an average day, when the long-term MA is preceded by a smaller short-term MA, the start of a bear run or drop becomes highly potent due to the price discovery. However, since Bitcoin is a relatively younger asset class, its market movements are usually unpredictable.
Major Changes in the Market can play a part in Reversing the Upcoming Death Cross for Bitcoin
After Bitcoin dived into the market in May, panic selling and fear started to seep into the ranks of maximalists. Nevertheless, those who were aiming for higher market targets were able to hold on to their long positions. Since then, several events have come to pass that might flip the switch on the death cross 2021. El Salvador and other American nations outside of the United States are embracing Bitcoin as a legal tender.
Meanwhile, a huge number of institutional investors have reportedly bought the dip. On the other hand, SEC has opened up public dialog on the matter of VanEck Bitcoin ETF approval. Likewise, Taproot deployment is locked in and ready to get launched in September. What is more, that the major mining rigs are moving into green energy venues like Texas in huge quantities.