Bitcoin, the world’s most popular cryptocurrency, is nearing a key technical indicator known as the “Death Cross,” which poses a threat to market stability.
The “Death Cross” is a technical chart pattern indicating the potential weakening of an asset’s price. The concept of “moving averages” is a key component of the graph, consisting of two distinct lines. These lines are derived from the average price during a particular time frame, which creates a refined line.
A death cross happens when Bitcoin’s short-term, 50-day Simple Moving Average (SMA) crosses under its long-term, 200-day SMA, often signifying a potential bearish turn.
Steven Ehrlich, a Forbes analyst, has recently brought attention to this trend, which, while not a guaranteed indicator of an impending bear market, has resulted in caution among traders and investors.
Despite the approaching Death Cross, Bitcoin has shown little volatility, fluctuating between $25,644.00 and $26,400.87 in 24 hours, according to data from CoinGecko.
In contrast with the cautious views surrounding the Death Cross, financial research firm Bernstein predicts a rally in the cryptocurrency market. This anticipated surge is expected to be primarily driven by Bitcoin, following a recent favorable court decision for Grayscale against the US.
The predicted market rally is expected to be fueled mainly by long-term institutional investors, indicating a potentially exciting phase for the future of cryptocurrency.