Bitcoin’s ‘death cross’ triggers a $1k drop erasing ‘Uptober’ gains

Bitcoin, the poster child of cryptocurrencies, faced a notable price decline on October 11, sending shockwaves through the crypto community. The world had anticipated October, or ‘Uptober’ as it was affectionately dubbed, to bring gains and renewed optimism to the crypto market. However, what transpired was a rather sudden downturn, with Bitcoin’s price dipping to a testing ground around $27,000.

For context, this particular price point had been a significant support level throughout the month, reinforcing the notion that Bitcoin was in for a strong, bullish October. But as the month reached its midway point, a noteworthy shift occurred, erasing all of the hard-earned gains made since the end of September.

To understand the implications of this price drop, crypto traders and analysts turned to the technical aspects of Bitcoin’s performance. Skew, a well-known figure in the crypto trading community, brought attention to the interplay between two key moving averages (MAs) on the charts. This interplay led to the ominous occurrence of a ‘death cross,’ which traditionally indicates a bearish trend in the cryptocurrency market. The ‘death cross’ unfolded as the 100-day moving average (MA) crossed below the 200-day MA, a stark contrast to the ‘golden cross’ that had previously signaled bullish prospects.

This ‘death cross’ was confirmed on October 9, and its effects were quickly felt. Bitcoin’s price took a hit, shedding nearly $1,000, or approximately 3.4%, of its value since the event’s confirmation. This dip pushed Bitcoin to a critical juncture where it found itself challenged by the 200-day MA, which acted as a robust resistance point.

The technical analysis of this price action painted a somewhat bleak picture. A popular trader known as Crypto Tony revealed that he had taken a short position on Bitcoin as it fell below $27,200. Another trader, Jelle, also weighed in on the situation. He observed that Bitcoin’s price, hovering around $27,000, was at a make-or-break point. The market’s response to this level was seen as a significant indicator of its short-term trajectory. The absence of an immediate buyback response, despite expectations, suggested a bearish sentiment.

In light of these developments, many began to contemplate Bitcoin’s future direction with a conservative outlook. Some even considered the possibility of a return to $20,000, a level not seen since late 2021. Rekt Capital, a respected trader and analyst, highlighted a critical observation. The BTC/USD weekly chart appeared to lack a macro-higher low compared to late 2022. In simple terms, Bitcoin had not formed a firm support level that could indicate a reversal from its recent downturn. Rekt Capital’s analysis pointed towards a potential price target of around $20,000. This target was linked to Bitcoin’s next block subsidy halving event, which was expected in April 2024.

The recent occurrence of the ‘Death Cross’ and the subsequent price actions have intensified the debate about Bitcoin’s short-term trajectory. Market participants are now closely monitoring key support and resistance levels. As is often the case in the cryptocurrency world, sentiment can shift rapidly, and only time will reveal whether this ‘Death Cross’ will be a turning point or a temporary setback in Bitcoin’s remarkable journey.