BORING WEEK OF SIDEWAYS ACTION FOR THE KING OF CRYPTOCURRENCIES
Bitcoin (BTC/USDT) has spent an entire week trading sideways in a channel between $47k and $51.5k since it flash-crashed all the way down to the $42k mark on the 4th of December. At the time of writing this analysis, which is in the middle of the Saturday night into Sunday, the largest cryptocurrency by market capitalization ($919.5B; down 9.4% compared to a week ago) is trading at just above $49k. In case you missed our previous article on BTC midweek, then here is the link where you can find out more details on the asset’s recent price action, as not much has changed since it was published.
The original crypto has continued struggling to get above the 50k mark, which is its nearest resistance level right now, but we fully expect the coin to keep on going sideways in the coming days at least, owing to the fact BTC has got some seemingly solid support in the form of the long-term 200-day Moving Average at approximately $46.8k. Breaking down below this price would probably point to another aggressive sell-off for Bitcoin once again, as a large percentage of traders (and their trading bots!) and crypto influencers (who, well, affect the decision-making processes of tens of millions small-time investors), use this MA to determine whether an asset is in a Bear Market or a Bull Market.
We are closely watching the round and psychological 50k level also due to the presence of another crucial Moving Average in this exact spot, namely the 200-day EMA, which is making a potential break to the upside even more complicated for BTC. This is a typical negative confluence of technical factors, and we should normally avoid entering any market whenever price action finds itself in a similar situation – with a conceivably rather ‘durable ceiling’ right overhead. Last Friday, the Bitcoin’s price was vehemently rejected at almost precisely the 50k point after growing in value by 7% between midnight and midday, which left a sinister-looking red candle with a small body and a long wick to the upside.
In layman’s terms, the selling pressure was too much for the Bulls on that occasion, and we will have to wait and see if they can regroup and get the better of the Bears in the coming days, or maybe hours or even… weeks (that’s right, we wouldn’t be surprised at all), before we become confident enough to do anything in this market again. There is one more ‘thing’ that has been making us … a bit worried lately though, to put it very mildly.
BITCOIN DEATH CROSS APPEARS ON THE 12-HOUR CHART
Yesterday Bitcoin got a Death Cross on the 12-hour chart for the first time since this past May. For those of you who are not yet familiar with this term, a Death Cross is a chart pattern that appears when a stock’s short-term Moving Average (typically 50-MA) – meaning the average price over a certain period – crosses below its long-term Moving Average (typically 200-MA). The opposite of a Death Cross is called a Golden Cross.
While we don’t ever intend to cause any panic among our Readers, it has to be said that this pattern has actually been extremely accurate in predicting the mid-term direction of Bitcoin’s price action over the recent years. Historically, it’s worked great in stock markets as well, as it has in most of financial markets including Forex etc.
The previous Death Cross that Bitcoin had, which was on the 16th of May, occurred when the Crypto King was trading precisely at the identical price as we are seeing right now! Okay, this kind of coincidence is, in our humble opinion, almost … paranormal (for a lack of a better word). Following the Death Cross last May, BTC declined in value by up to a whooping 47% at the lowest point. That’s admittedly a solid reason to be concerned at least.
At cryptodaily.co.uk, we will never tell you what to do or what not to do, because our only goal is to provide our Readers with facts, and the final decision is always up to you, as you are the only ones responsible for managing your own investments. Please analyse the attached images for yourselves, and whether or not you take this information into consideration, that is totally your call. As far as we are concerned, this market’s medium-term future is looking extremely uncertain at the moment, and that’s also why we will publish another update on the largest cryptocurrency as soon as this Wednesday. See you all then, stay safe in the markets!
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
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