As the ‘Death Cross’ Approaches, Bitcoin’s Bad Days Return.
For the time being, the crypto bull market may have peaked.
Bitcoin, the wildly wasteful and inherently speculative cryptocurrency, is flatlining in the new year.
According to Bloomberg, Bitcoin recently fell 6%, briefly falling below the (dollar)40,000 mark ((dollar)39,774)—the cryptocurrency’s worst start to a year since 2012.
That’s down more than 40% from its November 2021 high of nearly (dollar)69,000 dollars.
Bitcoin’s value was hovering around (dollar)41,320 early Monday afternoon.
According to Bloomberg, cryptocurrency “has had a pretty shocking start to 2022,” according to Fiona Cincotta, a senior financial markets analyst at City Index.
There is a great deal going on right now.
“Bitcoin could end 2022 below (dollar)20,000,” said Jay Hatfield, the CEO of Infrastructure Capital Advisors, as the Federal Reserve reduces “liquidity injections” intended as a pandemic stimulus.
Many cryptocurrency investors regard (dollar)40,000 as a significant, if arbitrary, marker of Bitcoin’s potential price floor.
To put it bluntly, many Bitcoin holders would be alarmed if the price fell significantly below that level for an extended period of time.
On Monday, Coindesk reported that Bitcoin appears to be approaching a “death cross,” which occurs when the 50-day moving average slinks below its 200-day equivalent.
This is frequently interpreted by investors as a sign that an investment’s short-term momentum is slowing, indicating that a bull market is about to end.
The death cross is an unreliable indicator, according to Coindesk, and Bitcoin has seen it at least three times since October 2019.
The value of the cryptocurrency quickly recovered in each case.
A bear trap is a situation in which…
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