Death Cross, Is it Scary?
The term Death Cross is a technical one from stock trading. It means an event when 50 day and 200 day two moving averages intersect.
In theory and real trading cases, the two lines are rarely meet. Generally, 200 day average includes 50 day data having 4 times longer time period. If the two lines intersect, it means the price move to whatever direction so seriously that 50 day average line may crosses the 200 day trend on the price chart. If this happen upward that 50 day lien crosses 200 line upward, we call it Golden Cross. But recently we got Death Cross in down turn market trend.
In the chart above, we can see 2 Death Crosses that first one happened last June and another one happen recently. So, one very clear and important question. “If a death cross happen, should we sell out all assets and run away?”
Based on past experience in stock market, death cross has meant the market got in very serious downturn. So many traders got the signal as a trigger to get out of the their positions.
Death Cross in Bitcoin and Cryptocurrency
It may be very hard to say that death cross is good thing for cryptocurrency.
But whatever it is, cryptocurrency has experienced this death cross many times for last 11 years and Bitcoin has been fine after the looking serious crisis Death Cross.
"People make it out to be a big, scary bearish event, but last time it happened, the market bottomed out, and shortly after pumped back up," said the analyst by email. "Similarly, in June '21, the market dipped after hitting $64k, fueled by leverage. This time around, the sell-off is probably due to the fed’s plans to reduce“. - Decrypto
Some traders do not seem to concern so much on the event Death Cross. Even though we should take the points that those traders have invested much so do not want to give bad signal to market, the market steadily and slowly getting stronger with underwater development and investment. There will be no clear answer as always we haven’t. Important thing is to see the market with multiple view based on clear understanding about crypto future.
Source: Decrypto
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