Bitcoin Weekly - Death Cross Incoming

Within the next few months, a 'Death Cross' (bearish crossover) will likely occur on the Bitcoin 50-Week Moving Average and the 100-Week Moving Average. On the Weekly timeframe, these are extremely rare events. But, it's important to understand that these events are most representative of what has occurred in the past, and not always indicative of what is to come.

BTC Weekly - 2015 to 2022 50/100MA 'Death Cross' events

“Both previous 'Death Cross' events marked the bottom of the bear market...”

The significance of a 50/100MA 'Death Cross' on the Weekly timeframe is that it has only happened twice before in Bitcoin's history: April 2015 & Feb 2019 - Both previous 'Death Cross' events marked the bottom of the bear market - When you couple this data with the fact that Bitcoin is oversold up to the 2 Month timeframe and in general entering into 'Bear Market Bottom' territory when analysing on-chain metrics, one can start to ponder that a macro bottom might not be too far off. But, take into account that we have not yet completed the Death Cross, and being a Weekly timeframe we may still have several weeks left before we actually get the crossover event, and, most importantly, a macro bottom. The speed at which a bearish crossover event occurs depends on the future price action of Bitcoin, and even though we have plenty of potential bearish macro catalysts to come in the next few months that'll affect both stocks and crypto (July CPI report, Q2 corporate earning reports, and likely another 0.75 rate hike), it would take a soothsayer to predict the actual outcome. At this point, we could see BTC realistically bottoming out between $10-17k, possibly even lower given the right conditions.

Does it mean that once a Death Cross event occurs that we'll enter into a new bull market? Short answer, no, of course not. In 2015, after the 'Death Cross' occured it took 200 days of sideways accumulation before price even managed to break thru the range, then another 200 days until a 'Golden Cross' occured (bullish crossover), after which BTC began a new macro uptrend - The eventual 'Golden Cross' event actually marked the start of an EPIC bull run from ~$400 to ~$19k, but not without some heavy corrections on the way to keep the market honest.

BTC Weekly - 2015 W1 50/100MA Death Cross

“...it took Bitcoin around 500 days to break out of the range set after the initial 'Death Cross' occured.”

In Feburary, 2019, BTC's second 'Death Cross' occured on the Weekly 50/100MA. This event was different though - The price action leading up to this event was brutal, BTC saw a 50% drop over just a month, completely flushing the market of long and short-term holders. However, after 6 months of steady accumulation, BTC pushed right back to $13k, formed a local top, and then proceeded to range between $6.5k and $10k. A 'Golden Cross' actually occured after only 287 days, indicative of the swift recovery Bitcoin had made over the course of the year. Of course, in March, 2020, the global economy felt the shock of the Covid black swan event, spurred on by forced lockdowns and the widespread uncertainty that followed. BTC flash-crashed to once again retest the previous local low in the $3k support zone. In total, it took Bitcoin around 500 days to break out of the range set after the initial 'Death Cross' occured.

BTC Weekly - 2019 W1 50/100MA Death Cross

Fast forward to today... Undoubtedly, the global economy is encountering historic macro conditions that could continue to punish the commodity markets, which includes Bitcoin. Even if Bitcoin is lucky and only sees a ~500 day reaccumulation period (like 2019), the earliest Bitcoin could re-enter a macro uptrend would be at the start of 2024. The following chart shows a scenario where Bitcoin ranges between $10k and $20k before finally breaking the range to retest the previous local low around $29k. This is by no means indicative of what will 'definitely' happen, just one of many possibilites.

BTC Weekly - 2022 W1 50/100MA Death Cross scenario

“This is the period where one can buy tokens at rock bottom prices, we've entered into the period of max pain”

Bitcoin's final bear market phase is underway, but by no means does this spell total doom and gloom for the cryptocurrency market. On the contrary, we are entering into a phase of 'max opportunity' - Let's say, for argument's sake, Bitcoin DOES find a macro bottom this year, potentially around September, and begins its ~500 days reaccumulation period - During this time, the crypto market can still see periods of strong price action, especially within the Altcoin markets, which by the time Bitcoin bottoms out will have experienced a complete flush out. The point is this: now is not the time to become complacent, fearful, and abandon crypto. Now is the time to work the hardest, hit the charts, research projects, and discover where the value will be in the next bull run. This is the period where one can buy tokens at 'rock bottom' prices. We've entered into the stage of 'max pain', long and short-term holders are suffering and showing signs of capitulation, meanwhile, the new generation of long-term holders and value-investors are beginning to slowly scale in. There is no rush, and as always, patience is key!

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