After crashing below $50,000 on Monday, August 5, Bitcoin, the largest cryptocurrency by market cap has recovered most of the losses from that day. Earlier today, the flagship cryptocurrency soared toward the $63,000 mark, reaching $62,510 according to CoinMarketCap data.
Over the last 24 hours, the coin has shown high volatility, trading as low as $57k before jumping to the daily high of more than $63k representing about a 9% increase. Additionally, Bitcoin has recovered up to 25% of its losses from Monday. This is partly because large investors, commonly known as whales, largely bought the dip showing increasing confidence in the future outlook of the asset amid the decline.
Bitcoin Rallied Into its Death Cross
A renowned crypto analyst and the founder of ITC crypto, Benjamin Cowen, previously predicted on Monday that Bitcoin will rally into its Death Cross in a video on his YouTube channel. Fast forward four days later and the prediction has happened and the bearish signal has been averted, at least for now.
Source: Benjamin Cowen/X
For context, a “Death Cross” is a term used in technical analysis to show recent price weaknesses of an asset. The chart shows the drop in the short-term moving average of an asset (cryptocurrencies and others) below and the longer-term moving average. Meaning, it shows the average closing price of an asset over a short period below a longer period.
In his thread, Cowen analyzed what happened during previous Death Crosses, dating back to 2019. He noted that Bitcoin started its rally in 2023 just after the Death Cross. It exceeded its 50D SMA and then cemented it as support before surging higher.
Source: Benjamin Cowen/X
Cowen continued, stating that 2022 had a different case as Bitcoin rallied a bit into the Death Cross but faded quickly right after the cross happened. 2021 had a similar pattern as BTC surged significantly before the Death Cross and then waned as it arrived.
In 2020, BTC moved into the Death Cross in a rally, then had a small pullback before continue surging like in 2023. 2019 however, had a strong rally into the Death Cross, which increased more on the day of the Death Cross before declining for the next few months.
Cowen concluded by pointing out that the strength of this move and the possibility of an uptrend will depend on Bitcoin’s ability to get above its 50D SMA of $62k and then establish it as support similar to 2023.
“If it fails to hold as support like 2019, then the slow grind down continues until a sufficient pivot from the Fed IMHO,” he added.
Meanwhile, the crypto community on Twitter chorused that the analysis holds no water pointing out that the Death Cross does not matter, and what is important is the second one.
One user, The Sovereign Ratio, said “The important thing to consider here is what happened the same year of the cycle in previous cycles. So, all I care about is 2020 and 2016 and there wasn’t one in 2016,” adding that the Death Cross is a “little-to-nothing burger” on the movement of crypto prices.
Crypto Market Reaction
Meanwhile, the broader crypto market has resurged from its previous decline. At the time of writing, the total market cap gained 5.65% to $2.13 trillion. The second-largest cryptocurrency by market cap, Ethereum, has mirrored BTC gains, surging by a notable 8.83% to trade above $2,600.
Other altcoins including Binance Coin (BNB), Solana (SOL), Dogecoin (DOGE), and Toncoin (TON) have exhibited impressive moments in the last 24 hours. Ultimately, crypto participants and investors are closely watching to see how Bitcoin reacts in the coming days and how it will shape the movement of the market as well.
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