Bitcoin (BTC) has formed a much feared “death cross,” a technical indicator that suggests further declines are likely in the price of the world’s largest cryptocurrency.
The price of Bitcoin has risen 1% over the last 24 hours to just under $26,500 U.S, continuing a recovery from a decline that had taken the price down as low as $25,000 U.S., its lowest level since mid-June of this year.
However, despite the current move higher, technical charts show that Bitcoin has formed a death cross that is likely to prompt crypto traders who have a long-term focus to now sell the digital asset and take profits before its price slides lower.
A death cross occurs when the short-term moving average of an asset or security falls below a longer-term moving average and is a sign of increasing price pressure on a stock or crypto.
Typically, a death cross forms when the 50-day moving average for prices falls below the 200-day moving average.
This is the first time that a death cross has formed on Bitcoin since January 2022. After that, the price of Bitcoin plunged from $47,000 U.S. to below $16,000 U.S. by December of last year.
In total, there have been nine Bitcoin death crosses since 2011 and they almost always appear before a period of volatility in the digital asset’s price.
Despite its recent slump, the price of Bitcoin is still up 60% in 2023. The price was above $31,000 U.S. in July.
