Bitcoin price must flip $62K to avoid worst ‘death cross’ consequences
2024.08.09 05:24
Bitcoin can beat its imminent “death cross” if it flips $62,000 to support, the latest analysis says.
In a dedicated X thread on Aug. 9, popular trader Benjamin Cowen used history to suggest how bulls might avoid a fresh Bitcoin (BTC) price dive.
$62,000 becomes key BTC price resistance hurdle
Recent BTC price action has led BTC/USD to the door of another moving average crossover classically known as a “death cross.”
This involves the downward-sloping 50-day simple moving average (SMA) crossing below its 200-day equivalent. Currently, the 50-day and 200-day SMAs stand at 61,998 and 91,882, respectively, per data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1-day chart with 50, 200SMA. Source: TradingView
The death cross gets its name from the assumption that the crossover acts as a prewarning for the downside of the BTC price once it is complete.
As Cowen shows, however, the results are often mixed. The last daily death cross in 2023, in fact, precluded a bout of gains.
“In 2023, BTC started its rally just after the death cross. It then got above its 50D SMA and subsequently held it as support before going higher,” he noted.
By contrast, in 2019, 2021 and 2022, a brief tap higher into the death cross event itself ultimately gave way to the expected result — losses.
“The durability of this move will likely depend on first BTC getting above its 50D SMA ($62k), and then holding it as support like it did in 2023,” Cowen concluded.
BTC/USD chart. Source: Benjamin Cowen
He added that should that fail, the downside may return until macroeconomic conditions notably change. Specifically, the United States Federal Reserve should perform a “sufficient pivot” on interest rates to boost crypto and risk assets.
Bitcoin open interest sluggish on BTC price rebound
BTC/USD continued its recovery on the day, reaching $62,775 into the prior daily close before returning to consolidate slightly lower at the time of writing.
Related: Bitcoin reclaims $62K, forming a ‘massive bull hammer’ on price chart
Source: Charles Edwards
Market observers noted a lack of rebound in futures market open interest despite the higher prices, this coming days after a giant flush rarely seen in Bitcoin’s history in terms of scale.
“This Bitcoin bounce has been mostly shorts covering positions in the futures market,” Julio Moreno, a contributor to onchain analytics platform CryptoQuant, wrote in part of an X response.
Bitcoin exchange open interest (BTC). Source: Julio Moreno
Fellow contributor Axel Adler Jr meanwhile flagged the area above $62,000 as key resistance, with major support still at this week’s six-month lows beneath $50,000.
BTC/USD chart. Source: Axel Adler Jr
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
