The Bitcoin market saw the dreaded Death Cross on June 19, much earlier than expected. But the expected effects didn’t really show up. In fact, this had no significant effect compared to the earlier death crosses. However, the signs of a golden cross are emerging that historically lead to a Bitcoin rally.
The death cross
This event has been feared by the entire crypto community as historically every Death Cross (DC) has resulted in a significant downfall. Instances from past DCs show us how much Bitcoin loses in such an event.
Take a look at the diagrams below and show us how BTC experienced the first major DC in 2014. During this phase, the coin fell 71.53%. Towards the end of next year, Bitcoin saw its first large Golden Cross (GC), which drove the coin into a bull run. Similarly, the 2018 Death Cross brought the coin down 65.11%, and almost a year later the coin had its GC which led the coin to rally.
However, from October 2019 to June 2020, the coin featured a range of DC and GC. These recurring events didn’t have as much of an impact on the price of Bitcoin as such events in general (the March 2020 drop was due to the Covid-19 panic sell-off). These occurrences are known as false crosses or meaningless trend crosses. These phenomena occur within a very short time frame, which is unusual for such significant events.
The time difference between these DCs and GCs was only 60 and 69 days, respectively. Hence, their effects are also short-term, which is why they are not as important as a TLC and GC in general.
The golden cross
In the most recent DC – June 19th – this death cross happened earlier than it should. Historically, a DC occurs at least 107 to 149 days after the first crash. The first crash in this case was the May crash, which saw Bitcoin plunge 53.78%. This means that the expected DC time frame is around the end of July to the beginning of September. However, the death cross occurred in less than 60 days.
Because of this, the current DC appears to be a fake DC or a meaningless trend cross. Accordingly, the market should soon have a similar golden cross. While it is a bogus GC, the event would drive the coin up and potentially bring it back to pre-crash levels. Based on the false GC’s historical timeframe, the next one should happen in about 60-69 days from June 19th. This puts the expected time around late July through early September, the exact time frame the DC was originally supposed to take place.
However, for the GC to take place, Bitcoin must keep its price movement above $ 29,000 as that is the critical level of support. As long as the king coin is above it, the last death cross will be invalid and the next golden cross will take place.
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