With major corrections in recent weeks, Bitcoin is approaching terrible losses. This is a pattern used in technical analysis to predict that the price will continue to decline with a very low margin of error. Bitcoin’s strong correction to influence trends is calculated using indicators used in technical analysis to predict future movements of moving averages. The average price of the digital currency for the past 50 days is almost above the average price for the past 200 days, which experts call the death cross.
Much of the financial investment is based on psychological factors that technical analysis seeks to decipher through graphical indicators that clearly define the behavior of investors in a particular scenario. Resistances or supports are usually the most used tools, but there are many other figures such as the commented death cross or the golden cross, which is the opposite and predicts a more bullish market.
The possible big drop in Bitcoin
According to Stephen Kelso, head of markets at ITI Capital, bitcoin could go as low as $ 20,000. Despite the fact that most of Bitcoin, such as Ethereum, is close to reaching its own ‘death cross’, the high influence and weight of Bitcoin is expected to drag the rest of the cryptocurrency.
The death cross refers to the intersection formed by the lines of the fast moving average of 50 days and slow moving average of 200 days. In general, it is considered a bearish signal. This has served as a signal in the face of major recessions such as 1929 or 2008, although it has also generated false signals as in 2016. For Bitcoin it would be the third in “its history.” In general, long-term investors shouldn’t panic if they encounter a deadly crossover on the chart, but it is a sign that they should be careful and prepare their portfolio for positions with various unexpected results.
Where is Bitcoin in right now?
The short-term Bitcoin situation is anyone’s guess. Every week that Bitcoin does not stop receiving threats from central banks, different financial institutions and prestigious economists, who believe that cryptocurrencies are an illegal world without intrinsic value and with a speculative asset.
In El Salvador, bitcoin has been called a legal currency within the country, although the region has requested technical help to implement its use without much success. According to the World Bank, it cannot support El Salvador in the decision to apply the bitcoin system for a matter of transparency. Textually, the World Bank has said the following: “While the government reached out to us for assistance on bitcoin, it is not something that the World Bank can support given transparency and environmental deficiencies.” “We are committed to helping El Salvador in various ways, including exchange transparency and regulatory processes,” they add.
As of this Friday, Bitcoin is down around 4% and is below $ 38,000. In addition, the weekend is just around the corner, a few dates feared by the cryptocurrency since on several occasions large falls in price have occurred on these days when the volume of business is lower. Bitcoin, unlike other currencies such as the euro or the dollar, does trade on weekends. The crossing of death is very close and we will be able to see its impact in the coming days and weeks. This is how the complicated world of cryptocurrencies currently stands.
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