Bitcoin
and other cryptocurrencies advanced Thursday but the picture for prices took a gloomy turn as the largest digital asset formed a so-called death cross, a technical indicator that could suggest selling pressure ahead.
The price of
Bitcoin
has risen 1% over the past 24 hours to just shy of $26,300, continuing to rebound from a selloff to $25,000 earlier this week, marking the lowest levels since mid-June. The biggest crypto remains close to the $26,000 mark that has provided support for much of the past month amid a historically slow period for digital asset trading, with volumes and volatility falling to multi-year lows.
“Bitcoin may have no problem rising … to $26,400. The question is whether this will cause the selloff to intensify,” said Alex Kuptsikevich, an analyst at broker FxPro. “A death cross has formed on the daily timeframe, which means that more traders focused on long-term technical analysis will be looking to sell on the upside.”
Indeed, while cryptos have risen in recent days alongside the wider stock market, with the
Dow Jones Industrial Average
and
S&P 500
also edging higher, the market backdrop has darkened for digital assets as Bitcoin remains at depressed levels. A death cross has formed for the first time since January 2022, marking an ill omen from a technical perspective. Bitcoin prices began 2022 above $47,000, plunging more than 65% to their trough that November.
A death cross is a closely watched technical indicator that often suggests a prevailing downtrend in prices, or at least a slide in sentiment toward bearishness. It marks when the 50-day moving average for prices falls below the 200-day moving average.
“There have been nine Bitcoin death crosses since 2011 and it’s almost a toss of a coin whether or not Bitcoin will be lower in the three, six or 12 months after the indicator flashes,” said Antoni Trenchev, founder and managing partner at crypto lender Nexo. “It traditionally indicates a bearish shift in momentum and confirms what many are thinking: It’s going to be a hard slog for Bitcoin in coming months.”
Beyond Bitcoin,
Ether
—the second-largest crypto—rose 1.5% to $1,620. Smaller cryptos
Cardano
and
Polygon
traded just below flat. Memecoins were more mixed, with
Dogecoin
advancing less than 1% and
Shiba Inu
falling less than 1%.
Write to Jack Denton at [email protected]
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