Source: Cointelegraph Original: "{title}"
On April 6, the price of Bitcoin formed a death cross on the daily chart—a technical pattern where the 50-day moving average (MA) falls below the 200-day moving average. Historically, death crosses are often associated with trend reversals and long-term bearish trading cycles, and this ominous signal sometimes foreshadows significant market corrections.
This death cross appears amid growing macroeconomic uncertainty. The stock market is affected by what seems to be the early stages of a trade war, with increased volatility and fear continuing to dominate investor sentiment. For some investors, the death cross in Bitcoin may be the final blow to hopes for a short-term rebound. Initial signs of selling from short-term holders may have already emerged.
However, not everyone views the outlook as bleak.
Bitcoin Death Cross History
By definition, a death cross confirms the end of a bull market phase. When the 50-day moving average falls below the 200-day moving average, it indicates that recent price movements have weakened relative to the long-term trend. Its opposite is a golden cross, which occurs when the 50-day moving average crosses above the 200-day moving average, typically signaling the start of a new rally.
Since Bitcoin's inception, there have been 10 death crosses, and we are currently in the 11th. Analyzing the dates and durations of these death crosses can provide important insights: every bear market has included a death cross, but not every death cross leads to a bear market. This distinction is crucial for understanding the current market situation.
BTC/USD 1-Day Death Cross Historical Record (Log). Source: Marie Poteriaieva, TradingView
Indeed, there are two types of death crosses: one that occurs in a bear market and another that happens during other periods. The three death crosses formed during the bear markets of 2014-2015, 2018, and 2022 lasted longer and were more painful. Their durations ranged from 9 to 13 months, with price corrections from the cross to the cycle bottom ranging between 55% and 68%.
The remaining seven death crosses were relatively less severe. Their durations ranged from 1.5 months to 3.5 months, with Bitcoin's declines varying from 27% to zero. In many cases, these signals marked local bottoms, followed by new rebounds.
This raises a key question: Has Bitcoin entered a bear market, or is this just another bear trap?
Bearish Signals?
If Bitcoin is indeed in a bear market, as CryptoQuant CEO Ki Young Ju believes, then the current death cross may indicate a price decline over the next 6 to 12 months. This outlook aligns with the discrepancy he observes between the current market capitalization and the realized market capitalization (realized market cap is the average cost basis of each wallet multiplied by the amount of Bitcoin held).
“If the realized market cap is growing, but the market cap is stagnant or declining, it means there is capital inflow, but prices are not rising—this is a typical bearish signal.”
Ki Young Ju added that the current data clearly points to the latter.
“Selling pressure could ease at any time, but historically, a true reversal usually takes at least six months—therefore, a rebound in the short term seems unlikely.”
BTC Growth Rate Discrepancy. Source: CryptoQuant
Other market participants, however, dismiss the existence of the death cross. Crypto analyst Mister Crypto believes that the current death cross is more like preparation for a rebound rather than a signal for a decline. He made this statement alongside a chart showing previous false signals in this cycle: “The trap is set again. This will be the most hated rebound of 2025!”
Bitcoin Death Cross During Bull Markets. Source: Mister Crypto
CoinShares Research Director James Butterfill also downplayed the significance of this signal. He stated, “For those who think a Bitcoin death cross means something, from experience, this is complete nonsense; in fact, it is usually a great buying opportunity.”
Butterfill's data indicates that, on average, Bitcoin's price only drops 3.2% one month after a death cross, and typically rises higher three months later.
Interestingly, Bitcoin is not the only asset sending warning signals. The Nasdaq 100 and S&P 500 indices are close to forming their own death crosses, while some individual tech stocks—including Apple, Microsoft, Nvidia, and Google's parent company Alphabet—have already triggered or are close to triggering death crosses.
Bitcoin's recent movements are part of a broader market reset, whether good or bad. However, it currently leans more towards the "bad" side: as some analysts point out, adverse conditions in the Nasdaq often negatively impact Bitcoin as well, unless Bitcoin fully realizes its role as digital gold.
This article does not contain investment advice or recommendations. Every investment and trade carries risks, and readers should conduct their own research before making decisions.
Related: Reportedly, Trump's next cryptocurrency plan will be to launch a game similar to Monopoly.
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