{"id":429780,"date":"2022-01-12T08:11:22","date_gmt":"2022-01-12T06:11:22","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=429780"},"modified":"2022-01-12T08:14:52","modified_gmt":"2022-01-12T06:14:52","slug":"bitcoin-facing-death-cross","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cryptocurrency\/429780-bitcoin-facing-death-cross.html","title":{"rendered":"Bitcoin facing “death cross”"},"content":{"rendered":"

After one of the roughest patches ever for Bitcoin enthusiasts, holders of the largest digital currency are facing an ominous technical price pattern with a name that suggests more pain ahead.<\/p>\n

Known as a death cross, the measure shows up whenever an asset\u2019s average price over the last 50 days drops below that of its 200-day moving average, an indication that its momentum is headed downward.<\/p>\n

And though it hasn\u2019t occurred yet for Bitcoin, it looks to be on course to hit it later this week, according to Mati Greenspan, founder of Quantum Economics.<\/p>\n

\u201cThe chart is pretty clear,\u201d he said.<\/p>\n

Bitcoin avoided forming the death cross for another day, rising 2.6% to around $42,813 as of 2:44 p.m. in New York. Before Tuesday, it had notched only three up days since the new year started.<\/p>\n

Ether, the second-largest digital token by market value, also looks to be on track to form a death cross, though it also traded higher to around $3,233 on Tuesday.<\/p>\n

But when it comes to the death cross, \u201cthe history is really mixed — there\u2019s no surprise given that some of the macro backdrop is affecting price action, but we\u2019ve seen a healthy bounce over the last 24 hours,\u201d Juthica Chou, head of OTC options trading at Kraken, said on Bloomberg\u2019s \u201cQuickTake Stock\u201d broadcast.<\/p>\n

\u201cAnd I think the fundamentals are still really strong.\u201d<\/p>\n

Prior to Tuesday\u2019s reprieve, cryptocurrencies had been under pressure in recent weeks, with Bitcoin dropping more than 30% since reaching a high of almost $69,000 in November.<\/p>\n

The latest stretch lower for digital assets is happening as odds rise that policymakers could commence a series of rate hikes as soon as March — and that\u2019s just one of several steps they\u2019re set to take in removing liquidity. In such an environment, speculative investments lose their luster.<\/p>\n

Only 5% of JPMorgan Chase & Co. clients now foresee Bitcoin\u00a0hitting<\/a><\/strong>\u00a0$100,000 by the end of 2022.<\/p>\n

The indicator is supposed to be bearish but Bitcoin\u2019s track record around death-cross formations remains murky.<\/p>\n

It marked the grim-sounding pattern in\u00a0June<\/a><\/strong>\u00a0of last year, and another one in March 2020 proved no impediment to gains as it turned higher and formed a golden cross (when the pattern is reversed) two months later. But a death cross in November 2019 saw the coin trading lower one month later.<\/p>\n

\u201cSome people say it\u2019s bearish, but for Bitcoin, just about all previous death crosses or golden crosses have proven to be a good buying opportunity, along with any other indicator under the sun for everyone who entered before 2021,\u201d Greenspan said.<\/p>\n

Whenever a death cross has occurred in the broader market indexes or stocks, most — though not all — of the bad news was priced in already, says Craig W. Johnson, chief market technician at Piper Sandler & Co. \u201cI think time could be a bigger risk to BTC than price at this point.\u201d<\/p>\n

Meanwhile, the International Monetary Fund issued the latest warning that parallels between cryptocurrency price moves and the stock market could pose a risk to financial markets. Correlation between U.S. stock indexes and Bitcoin jumped to 0.36 in 2020, up from 0.01 between 2017 and 2019, according to the multi-nation organization.<\/p>\n

Analysts have long noted that Bitcoin — and, therefore, other cryptocurrencies — tend to move in tandem with stocks. Lately, that relationship has strengthened and was even on display on Tuesday, with both stocks and crypto reversing early-morning losses to trade higher by the afternoon.<\/p>\n

Both have been volatile recently amid signs that the Federal Reserve was comfortable withdrawing stimulus at a faster pace than previously anticipated.<\/p>\n

The 100-day correlation coefficient of Bitcoin and the S&P 500 currently stands at 0.44. That\u2019s the highest such reading since the fourth quarter of 2020 and among the highest going back a decade. A coefficient of 1 means the assets are moving in lockstep, while minus-1 would show they\u2019re moving in opposite directions.<\/p>\n

The increasing interconnectedness between the asset classes \u201cpermits the transmission of shocks that can destabilize financial markets,\u201d analysts said in a Tuesday report.<\/p>\n

Officials are especially concerned as more emerging-market economies adopt cryptocurrencies as legal tender, notably El Salvador which embraced Bitcoin as a form of payment last year.<\/p>\n

\"\"<\/a><\/p>\n

\n

Now read: Hawks investigating Bitcoin Brothers<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"

After one of the roughest patches ever for Bitcoin enthusiasts, holders of the largest digital currency are facing an ominous technical price pattern with a name that suggests more pain ahead.\u00a0<\/p>\n","protected":false},"author":341034,"featured_media":394737,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44696],"tags":[187,191],"class_list":["post-429780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/429780"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=429780"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/429780\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/394737"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=429780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=429780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=429780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}