Bitcoin Death Cross Impending, BTC Price Could See Deeper Slide in Short Term

Bitcoin's bear market might have plenty of steam left as technical analysis indicates a death cross is fast approaching.

Technical analysis indicates that Bitcoin’s (BTC) price woes may not be over just yet, with a death cross on the horizon. This price pattern is typically associated with heightened fear and impulsive reactions among traders.

The onset of a dreaded death cross could limit upside moves for the largest cryptocurrency, potentially leading to a deeper price decline in the short term.

A death cross occurs when the 50-day simple moving average (SMA) of an asset's market price slips below the 200-day SMA. At the time of writing, Bitcoin is trading at $59,597 on CoinGecko, up 8.7% over the past 24 hours. The 50-day SMA for BTC now stands at $62,488 and is continuing to slide, potentially setting up a crossover with the 200-day SMA at $61,664.

This bearish crossover indicates that Bitcoin’s short-term momentum is underperforming its long-term average, a trend that short-term traders often interpret as a bearish signal. However, it does not guarantee that future price movements will follow the same direction. Long-term hodlers who can endure the discomfort of a bearish phase are usually rewarded with substantial gains during periods of strong recovery.

The last time Bitcoin encountered a death cross was in September 2023, during one of the most bearish months in Bitcoin's history. On the same day, the cryptocurrency bottomed out just below the $25,000 level before surging almost 200% to reach a new all-time high of over $73,700 six months later.

Since hitting its highest price on July 29, BTC has lost 31% of its value, and the upcoming crossover and price decline could mark the final stage of the current bear market.

Traders are advised to keep an eye on macro correlations, according to trading firm QCP Capital.

“While the initial shock may have passed, we foresee continued selling pressure in the coming days as systematic funds continue to pare exposure in light of the heightened volatility,” QCP recently stated in a message to its Telegram channel subscribers.

“We recommend keeping a close eye on Nasdaq, Nikkei, and USDJPY as cross-asset correlations remain high in the near term.”

According to QCP, crypto holders should now concentrate on long-term strategies.

“With the acute phase of market volatility over, we favor establishing longer-term bullish positions in anticipation of a cutting cycle. The experts concluded, "We prefer trades with a 3-6mth time horizon to avoid getting chopped up by higher volatilities.

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