Bitcoin’s recent price decline has sparked concerns among investors, with the cryptocurrency’s value falling to $80,000 on Friday. This drop has led to a convergence of technical indicators that have preceded extended declines in the past, potentially signaling the start of a bear market. The Bitcoin “death cross,” a technical pattern that has previously resulted in significant price declines, has resurfaced, adding to the concerns.
Bitcoin’s Macro Bullish Trend Has Been Invalidated
The BTC/USD pair closed below its 50-week moving average on Sunday, a level that crypto analyst Rekt Capital has been closely watching. Rekt Capital stated that “price needs to reclaim it immediately through a recovery rally to protect the structure.” The analyst emphasized that if the weekly close price is below the 50-week EMA, it will be difficult for Bitcoin to maintain its bullish market structure. Rekt Capital noted that “when the macroeconomic trend changes, bullish market structures become invalid.”
Bitcoin’s fall below key support levels, including the 100-week moving average, has resulted in a six-month low of $80,500. The price confirmed a “death cross” on its daily chart late last week, a technical pattern that previously preceded significant price declines. On Sunday, Bitcoin’s 50-day simple moving average (SMA) crossed below its 200-day SMA for the first time since January 2024, forming a death cross.
Historical Precedent of the Death Cross
Analyst Mister Crypto noted that “every Bitcoin cycle ended with a death cross,” asking “why should this time be any different?” Historical data shows that the death cross has been followed by significant price declines. In January 2022, the death cross was followed by a 64% drop in BTC price, while March 2018 and September 2014 saw BTC price declines of 67% and 71%, respectively, after similar SMA crossovers.
Bitcoin’s Realized Losses Exceeded $800 Million
As selling pressure increases, the volume of realized losses has increased to levels not seen since the FTX collapse in 2022. On-chain data provider Glassnode released a chart showing that Bitcoin’s total realized losses among both short- and long-term holders have increased to ranges above $800 million on a seven-day rolling basis. Glassnode noted that “short-term holders are responsible for the majority of capitulation,” adding that “the magnitude and speed of these losses reflect a significant decline in marginal demand as recent buyers become caught up in the decline.”
CryptoQuant analyst IT Tech shares a similar view, saying that short-term selling “often marks a local bottom when price quickly reclaims cost base,” adding that “failure to do so historically suggests a deeper downtrend or confirms a bear market.”
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