The last time this signal appeared, Bitcoin fell 15% right after

The positive momentum in the crypto market is currently being overshadowed by the crossing of two key moving averages.

A death cross was created through the 50-day MA and the 200-day MA. This time it is a crossover between the 100-day MA and the 200-day MA.

Looking back on the death cross created in June-July 2021, the market reacted negatively with a fall of more than 15% thereafter.

Technical Analysis

Long Term – Daily

Bitcoin has been on the rise over the past few days.

The positive point is that Bitcoin broke a major descending trendline and is attempting to hold above the 50-day ma. However, the negative point to emphasize here is that the 100-day MA has fallen below the 200-day MA. The last time this happened was in the final stages of a sharp correction in mid-2021. The price then fell more than 15% to below $30,000, ending the last drop before the start – a notable recovery.

BTC/USDT daily chart | Source: TradingView

Short term – 4 hours

On the 4 hour time frame, it is clear that the price is currently being rejected by the $45,000 resistance area. Additionally, the RSI shows that Bitcoin is “overbought” on the 4-hour timeframe and a correction may be imminent.

From a technical point of view, the price is more likely to undergo a correction to the $39,000 area and complete the first major pullback after breaking above the key downtrend line.

However, traders should monitor the price reaction at this level as a deeper correction into the $33,000 region (January low) is still possible, especially as the 100-day MA and 200-day MA created a death cross.

BTC/USDT 4 hour chart | Source: TradingView

Onchain analysis

The NVT (Network Value to Transaction) ratio illustrates the relationship between market capitalization and onchain transaction volume. It is similar to the PE ratio used in the stock market.

NVT is a metric that determines whether the Bitcoin blockchain network is overvalued.

Historically, when the price fell below the NVT price in 90 days and 28 days, it was a great opportunity to accumulate BTC according to the DCA strategy.

Currently, the Bitcoin price is lower than the NVT price. It shows that the network is undervalued and seen as an ideal time to start accumulating BTC. Additionally, traders can take profits when the price breaks through the NVT price.

Source: date

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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