Bitcoin bulls are slowly emerging from the shadows following a gruesome month of price action.
The world’s largest cryptocurrency by market cap is now more than 30% down from October’s peak of $10,350.
However, since dramatically falling to lows of $6,500 on Monday, Bitcoin has experienced a 10% bounce back up to the $7,150 region.
But the relief rally may all be in vain for Bitcoin as the daily death cross has now come to fruition after weeks of nervous anticipation.
With the 50 EMA crossing the 200 EMA to the downside, Bitcoin now looks set to explore a path to yearly lows with a further 60% correction on the horizon.
It’s worth noting that the exponential moving average death cross has happened just three times since 2014, with the previous crosses happening during the morbid bear markets of 2014 and 2018.
A continued dive in price will undoubtedly drive away a large section of the retail investors still tied to this industry, although data suggests that most retail investors gave up in 2018.
The surge from $3,150 to $14,000 earlier this year was caused by a spike in institutional investment coupled with the hype surrounding Facebook’s proposed launch of a cryptocurrency.
However, with Bitcoin now around 50% down from its yearly high, it’s unlikely that institutions will want to go anywhere near it until a prolonged bounce comes into play.
Consistent lower highs since $14,000, similar to the lower highs from $20,000 in 2018, is a clear sign of a bear market, and traders should approach with caution.
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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.