Know The Crypto Carnage Strategy
Over the weekend, the world’s most popular cryptocurrency Bitcoin began a technical sell signal, indicating more downside forward. Bitcoin felt a bearish “death cross”. This happens when the shorter-term 50-day moving average dips below the longer-term 200-day moving average gateway. It is widely followed by high-tech analysts and traders. Over the weekend, the world’s most popular cryptocurrency Bitcoin triggered a technical sell signal, indicating more downside ahead.
The crypto coin was trading lower by 4% at $32,715.28 at 19:48 IST Monday, according to the cryptocurrency trading website coindesk.com. Its market capitalization also reduced to $613.03 billion. However, its lowest price during the 24-hour trading was reported to be $31,744.99 and the highest was reported at $36,119.80. It opened at $34,246.37 during the time of trading on Monday.
Bitcoin falls down 10% in wake of deepening China crackdown
While the lagging crossover indicator warned traders that bitcoins are solidifying their uptrend and are most likely to experience a continuation, it resulted in lower cost. Bitcoin stocks quit off by 14 percent as of Monday morning after it struck death cross on Saturday.
Reports suggest that the technical indicator, in the cryptocurrency kicked in post negative news flow including China’s continued crackdown on bitcoin mining. Chinese authorities increase their crackdown on cryptocurrency mining over the weekend, with bodies in the Sichuan province ordering 26 of the biggest miners to halt operations, reported Business Insider.
Furthermore, the report asserted that Chinese authorities held a meeting with officials from major banks to reiterate a ban on providing crypto services. Other than bitcoin, cryptocurrencies including ether and Binance coin sold off by approximately 6 and 4 percent respectively, according to Coinmarketcap. Meanwhile, the Chinese state media outlet — Global Times — reported that more than 90 percent of China’s bitcoin mining capacity would be closed on Monday.
MicroStrategy CEO Michael Saylor, however, sees the recent decline in bitcoin as a buying chance. The firm said that it has acquired an additional $489 million worth of bitcoin, bringing its total holdings to 105,085 bitcoins. Earlier in May 2020, bitcoin experienced a golden cross, but since then the digital currency increased by more than 300 percent.
A death cross occurs when the short-term moving average, which is an average of which direction protection is moving, breaks below its long-term moving average. At that point, both short- and long-term moving averages tend to drop, so a “death cross” is pessimistic indicating further losses.
The chart analyst is named after the downward spiral created by the cross form of the moving averages.
It can happen in individual equities or funds, as well as other assets such as cryptocurrency. (See also: Bitcoin Bloodbath: Price Drops as Crypto Market Cap Drops $53 Billion.) Spotting a Death Cross on a bitcoin chart
With bitcoin, its short-term, 50-day moving average is high speed closing in on its long-term, 200-day moving average. It’s the closest the two figures have been in nine months, and, if they cross, it would be the second time since 2021. Above: A Death Cross occurs when the 50-day SMA crosses the 200-day SMA, which looks mature to happen (image: Investopedia using Tradingview)
Some analysts say that the death cross is not a Technical Gallery for timing. In other words, a spurn is not necessarily imminent right when the short-term average slips below the long-term average. They also say that the death cross does not Warrant future declines, as other market forces can drive the security – or currency – higher. Bitcoin, a temporary asset, has had a rough week, sliding on growing edges about regulation, including in the U.S. and Japan. The Cost of the bitcoin briefly dropped below $8,000 but has since recovered. It’s up about 2% in early Friday trade, with its cost at about $8,475.88 per U.S. dollar.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly dangerous and speculative, and this article is not a recommendation by Investigator or the writer to invest in cryptocurrencies or ICOs. Since each individual’s circumstances are unique, a qualified expert should always be consulted before making any financial decisions. Investigator makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date, this article was written, the author himself no stake in bitcoin or cryptocurrency-related securities.