- October 25, 2019
- Posted by: Tradingshot Articles
- Category: Cryptocurrency
A lot of talk is being made recently regarding the Death Cross of Bitcoin on the 1D chart. Today’s extreme spike appears to be ignoring this usually bearish formation and I thought it would be productive to see how the 1D Death Cross pattern has traded in the past, both in Bull and Bear Cycles.
2018 (Bear Cycle)
I start with the obvious comparison with the more recent 2018 Death Cross with is on the main picture of this analysis. The RSI then hit 30.00 same as the current set up and then aggressively rebounded towards the MA200 (orange) only to get rejected to a new Lower Low in the coming months. It is very similar to the current sequence.
2015 (Bull Cycle)
This can be actually considered as the only other time we had a 1D Death Cross during a Bull Cycle other than the current one, assuming people consider January 2015 as the market bottom. The RSI was 40.00 when it rebounded on the Death Cross and initiated a very strong parabolic run. The pattern looks quite different from the current price action.
2014 September (Bear Cycle)
The 2nd Death Cross of 2014 was trading on a 17.40 RSI and despite the bullish divergence massively declined to a new low shortly after the formation. Not similar to what we have today.
2014 April (Bear Cycle)
The 1st Death Cross of 2014 posted a decent rise after its Death Cross, similar to what we’ve seen today and after touching the MA200 and trading on it for a while dropped to new Lower Lows. It is similar to the 2018 sequence and fairly similar to today’s candle sequence.
2011 (Bear Cycle)
The price was trading near a 30.00 RSI value when the Death Cross took place during the 2011 Bear Cycle and without posting any rise, it gradually bottomed to a new Low (eventually the market bottom). Not many similarities with what we have now.
The bottom line is that the current (2019) Death Cross formation has more in common with crosses during Bear Markets and the 2018 and 2014 (April) in particular. These comparisons are purely educational, you should use them as reference but not too strictly as the current sequence may print something completely different that we haven’t seen before.