Bitcoin Weekly Death cross is HERE!
First ever weekly death cross happened in BITCOIN
Here is what can happen next :
First, let's understand what these terms mean: A golden cross suggests a long-term bull market going forward, while a death cross suggests a long-term bear market.
Golden Cross occurs when 50 Day Moving Average crosses over 200 D moving average
Why does it work?
50MA signals a shorter time frame trend which, when crossing over 200MA ( a longer trend ) signals a trend reversal.
Death Cross, on the other hand, occurs when 200 Day Moving Average crosses under 50 Day moving average
Why does it work
50MA signals a shorter time frame trend which, when crossing under 200MA ( a longer trend ) signals a trend reversal on the downside.
Does this always work?
NO
In the example below Golden cross is negated quickly.
How to trade it?
A death cross is generally not to be traded, as it signals trend change in higher time frames and it is a lagging indicator.
Should you be worried?
Unless accompanied by big volume/catalyst news crosses can be ignored for the majority of your trades. Just keep it as a check for longer time frames.
What about Bitcoin Weekly death cross?
Since it is the first death cross for bitcoin in a weekly time frame it is hard to say what will happen but we can take a look at NASDAQ and get to a conclusion.
NASDAQ had a volatile decade from 2000-2010 and went through various death cross and golden crosses
In hindsight, it looks like yes DC and GC work well but take a look at the date range, all these crosses lasted more than a year in their trend. The market went up 60% after the first DC
After the Second death cross market falls before going up 100% to create a golden cross relatively quickly. 1450 days for first golden cross and just 460 days for the second golden cross.
We are yet to see another death cross happening in NASDAQ, it has been 4800 days almost!
In this period we have seen major crashes upto 30% but nothing too worse than a death cross which was around 53%.
Conclusion: Don't take crosses too seriously as it doesn't mean much just signal a rough momentum of the market trend :)