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BITCOIN What to look for on the emerging 1D Death Cross

INDEX:BTCUSD   Bitcoin
Yesterday update was on the short-term, as the opportunity inside the Channel Down on the 1H time-frame was too good to ignore:


Right now though my focus shifts again on the longer-term dynamics as the Death Cross, an important MA formation, enters the center stage.

A Death Cross (when the MA50 crosses below the MA200) is approaching on the 1D time-frame. By definition it is technically a bearish formation as the short-term MA (50) crosses below the long-term MA (200) confirming a trend change from (previously) bullish to (currently) bearish.

** Death Cross on every Bear Cycle **
As you see on the charts above, this has been a distinct characteristic of all of the previous Bear Cycles (2018, 2014, 2011). Even the mini correction during 2019. The only time a 1D Death Cross didn't deliver a Lower Low was in March 2020 on a once in a 100 years event: BTC crashed along with global stock markets as countries declared emergency ahead of the COVID pandemic. However the trillion USD rescue packages managed to reverse the sentiment and lift BTC instantly.

** Death Cross misses **
There have been a few near misses where the 1D MA50 (blue trend-line) reversed right before it touched the 1D MA200 (orange trend-line). That was in October 2020, September 2016, August 2013 and April 2011. The peculiarity of those Death Cross misses, was that the 0.618 Fibonacci retracement level (from the lowest point before the pending cross) was recovered (exception 2016 where the 0.618 was failed to be recover by a very low margin $646 against a $633 high).

** In need of an unrealistic (?) rally **
Currently the 0.618 Fibonacci rectracement level is at $48000 and it appears that even that won't be enough to make BTC avoid the upcoming 1D Death Cross as it would need a monthly closing (June) above $54000 (and of course the same goes for July, August onwards) to marginally avoid it. There are 21 days left on June so that would require an average daily rise of more than $850. Under the current news set-up this seems unrealistic, even though Bitcoin did rise from $3200 to $58300 in 20 days (from February 01, 2021 to February 21, 2021).

So since the current 1D Death Cross seems unavoidable, history suggests that a Lower Low is comming either in the greater framework of a Bear Cycle (2018, 2014, 2011) or the mini Bear of 2019. If not, then some really earth shattering postivie news should emerge in order to deliver a March 2020 like recovery after the 1D Death Cross. Are the El Salvador or ETF approval news enough? What do you think?

Feel free to share your work and let me know in the comments section!



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