Bitcoin To $40,000? Signal Behind Past 60% Crashes | Crypto News
A cryptocurrency analyst has identified how a technical analysis (TA) signal that led into major price declines in the past has returned for Bitcoin.
Monthly MACD Has Turned Bearish For Bitcoin
In a new post on X, analyst Ali Martinez has talked about a signal that has shaped in the Moving Average Convergence/Divergence (MACD) for Bitcoin. MACD is a TA indicator that’s usually used for timing buys and sells in an asset’s price chart.
The indicator consists of two traces: MACD line and signal line. The first of these, the MACD line, is discovered by subtracting the 26-period exponential shifting average (EMA) of the price from its 12-period EMA. The signal line tracks the 9-period EMA of this distinction.
Crossovers between the 2 traces can present buy or promote alerts for the asset. The MACD line breaking above the signal line could possibly be thought of a bullish signal, while the reverse kind of crossover a bearish one.
Now, right here is the chart shared by Martinez that exhibits how the month-to-month MACD has modified for Bitcoin over the last a number of years:
As displayed in the above graph, the Bitcoin MACD has registered a crossover just lately. The MACD line has plunged as the asset has witnessed its bearish momentum and it’s now sitting under the signal line.
As talked about earlier, such a signal will be a bearish one. In the chart, the analyst has highlighted the past situations of this sample. It would seem that the last three promote alerts from the indicator all led into declines of more than 60% for the cryptocurrency.
“If that repeats, the chart points to $40,000,” famous Martinez. It now stays to be seen whether or not the MACD will maintain for Bitcoin, or if a different development from the past will observe this time around.
The MACD line falling under its signal line isn’t the only bearish crossover that BTC has confronted just lately. As the analyst has identified in another X post, a basic death cross has also appeared between the asset’s 50-day simple shifting average (SMA) and 200-day SMA.
From the chart, it’s obvious that the 50-day SMA has declined below the 200-day SMA alongside the latest Bitcoin market downturn. During the past couple of years, each such signal has marked local bottoms for BTC, but in 2022, this crossover kicked off the bear market.
So far since the death cross has appeared, the asset has continued to decline, a potential signal that this death cross could also be different from the current ones.
BTC Price
At the time of writing, Bitcoin is floating around $88,800, down over 4% in the last seven days.
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