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If youâve been following the cryptocurrency news, been trying to buy Bitcoin in India, or looking for the best cryptocurrency exchange, you would have definitely come across the term âBitcoin Death Cross.â
What exactly is a âDeath Crossâ and how is your cryptocurrency wallet going to be affected by it?
As the name suggests, it doesnât seem like a positive term at all. And it isnât.
Death Cross is a term for the formation that the price chart of any cryptocurrency, stock, or market makes. A âcrossâ appears when the average price of the last 50 days falls lower than the moving average price of the last 200 days. This intersection, like a cross, happens because the price decreases so rapidly.
The complete reverse of the Death Cross is called the Golden Cross when the same pattern is repeated but with an upward trend.
If you are looking for a cryptocurrency to invest in, it becomes essential to be well versed with these terms and look for these trends.
While the Death Cross appears only after the drop in the prices, it can be a good indicator of what might follow. This could help you strategize your cryptocurrency trading.
Looking at previous trends, massive Death Crosses appeared in the market in 1929, 1938, 1974, and 2008. Cryptocurrency exchanges have also seen a Death Cross in Bitcoin in March 2020 and March 2018.
Both times, within the following month, the prices of Bitcoin shot up. In 2020, soon after the Bitcoin Death Cross, the volatile cryptocurrency formed a golden cross! Falling by 60% in six days, Bitcoin recovered by over 1000% in the remaining year. The Death Cross of 2020 definitely proved to be one of the best investments for those looking for cryptocurrencies to buy at low prices.
But can a Death Cross be an indicator of an increase in prices in the future? Not typically. While some crypto investors believe Death Crosses usually indicate a further fall in prices, most investors look at this as an opportunity to make long-term investments by buying at low prices. For those looking to make such investments, you buy bitcoin in India or other cryptocurrencies and even keep an eye on the latest news and trends through ZebPay.
As indicated by the best cryptocurrency exchanges, bitcoin remains to be a popular cryptocurrency.
So, what made Bitcoin reach the Death Cross in June 2021?
China tightened its grip on cryptocurrency trading by shutting down bitcoin mining projects in an attempt to control financial risks. This created an air of uncertainty around the future of crypto trading which led to the massive fall.
However, just like 2020, Bitcoin managed to form another Golden Cross in September 2021, just 2 months after the appearance of the Death Cross. From a trading price of $9,500 in May 2020, Bitcoin rose to $65,000 in February 2021 only to fall to $28,600 during the Death Cross. In October 2021, Bitcoin made a commendable recovery coming back to $57,500.
While Bitcoin recovered quickly, these crosses remain to be an indicator of past performance. One can only speculate the future performance of any cryptocurrency by using these charts alone. There are plenty of other indicators that must be considered together to properly gauge any future performance.
Stay tuned and read our featured blogs to know more about how cryptocurrency works and make smart investments!
Sources:
https://fortune.com/2021/06/22/bitcoin-death-cross/
https://finance.yahoo.com/quote/BTC-USD/
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.