Bitcoin could be heading to yearly lows following last month’s death cross and a lack of positive sentiment.
Bitcoin endured a distressing exponential moving average death cross on the daily chart on November 23, with several analysts suggesting that a descent to $5,900 is now on the cards.
However, there has been a period of relative calm since the death cross, with Bitcoin languishing along the $7,350 level of support following a brief rally to $7,850 earlier this week.
The previous two death crosses took place during the 2014 and 2018 bear markets, with Bitcoin proceeding to fall by more than 60% on both occasions.
A slump of the same magnitude this time around would take Bitcoin to last December’s bitter lows of $3,150, although analysts like Tone Vays and Peter Schiff have been calling for targets lower than $1,800.
In order for Bitcoin to rally back towards new highs, it would need to trigger a technical reversal, which would only happen if it can close a daily candle above the death cross at $8,662.
The most likely stopping points for Bitcoin over the coming weeks are the $6,750 and $5,900 levels of support, both of which held for significant amounts of time during the 2018 bear market.
Upside targets remain at $7,900 and $8,400, although a news event may be required to drive attention and positive sentiment in the market.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.