Bulls shouldn’t be afraid of the upcoming Death Cross on the BTC and ETH charts

Bitcoin is set to form an ominous technical indicator commonly known as the “Death Cross” later this week.

This super bearish indicator occurs when the 50-day simple moving average (SMA) slips below the 200-day SMA, indicating a decisive shift in market sentiment from bullish to bearish.

A death cross will form on both the BTC and ETH charts | The source: Bloomberg

BTC is currently trading at $ 42,785 after falling below $ 40,000 on Monday.

However, analysts claim that the scary sounding Death Cross is often a lagging indicator as it reflects the past performance of the cryptocurrency.

Mati Greenspan, founder of Quantum Economics, commented that virtually all previous Death Crosses have turned into buying opportunities:

“Some say it’s bearish, but for Bitcoin, almost all previous Death Crosses or gold crosses have proven to be good buying opportunities.”

Bitcoin formed a death cross in June, just days before it hit a local low of around $ 28,500. The top cryptocurrency finally gained momentum again in August and formed a golden cross in mid-September (50-day SMA over 200-day SMA).

However, a possible bearish scenario should not be completely ruled out.

After Bitcoin formed a death cross in 2018, the price corrected 55%. It took over a year for the golden cross to appear. The same scenario played out during the 2014-2015 bear market. Historically, if the market does not recover within 3 months of the Death Cross, Bitcoin tends to lose more.

The source: Venture founder

Smart money will “buy fear”

Well-known analyst Nicholas Merten said Bitcoin will keep falling, but smart money will flow at a lower price and make a big rally. In the new update video, the host of the DataDash channel to speak that:

“Bitcoin is going through a unique cycle, a market driven by credit and leverage.”

However, the analyst offers some bullish predictions given volatile market conditions.

“And if you want to comfort yourself a little when you see Bitcoin drop again, I think it’s very real that BTC market cap will drop to around $ 600-650 billion.”

Currently, the market capitalization of Bitcoin is $ 808 billion. So a drop to $ 600 billion would be 25%, but Merten says this correction will ultimately benefit the market.

“That will allow BTC to hit higher ground along a rising support line above previous resistance in the 2017 cycle and / or we may see it jump into the $ 650-700 billion area sooner.”

Source: DataDash

According to Merten, smart money buyers will see the upcoming BTC boom as a big buy signal.

“Why so? Because that would be a sign that the market is not entering a bear market. In fact, smart money will appear and actively buy when fear rages, which will drive prices so high in 2022. The chances are good.”

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page