Bitcoins rapid rise to $86,000 has sparked new interest in the cryptocurrency market and contributed to bulls back in the spotlight. However, this price rise hides a troubling technical sign: a death cross. The 50-day moving average (MA) fell below the 200-day MA on April 6. This pattern usually means that the major direction is changing. Traders aren’t sure if this rise is real or if we’re just on the edge of another crash, even though the current price action looks strong.
What is the death cross and why does it matter?
With bearish momentum, a “death cross” is often present, traditionally indicating the end of a bull phase and the start of long-lasting declines. The golden cross, on the other hand, usually shows that prices are going up again. Bitcoin has been through 11 death crosses since it began, including the one we are in now. Some turned into full-on bear markets, but not all of them did.
During Bitcoin’s bear markets—in 2014–2015, 2018, and 2022—the three significant death crosses caused drops of up to 68% that lasted 9 to 13 months. On the other hand, the last seven death crosses were much less harmful, and some even happened before prices recovered within weeks.
Bear Market or Bear Trap?
It’s important to know if Bitcoin is really in a “bear market” or if this is just another “bear trap” to get weak hands to sell. The CEO of CryptoQuant, Ki Young Ju, says the market is showing classic signs of being bearish. The “realised cap” (the total average cost base of holders) is going up while the “market cap” is staying the same. Money is coming in, but prices aren’t going up or down simultaneously. In general, that’s a bad sign for bulls.
Conclusion
Bitcoin’s rise to $86,000 is impressive, but the “death cross” remains a possible storm cloud. History shows that not all death crosses mean bad things will happen, but the bigger picture, which includes rising volatility and weak stock markets, makes it even more important to be careful. Traders need to look at both the good and the bad news.
