Bitcoin is on the brink of a macro reversal in terms of price action having slumped dramatically from its all-time high of $65,000 just one week after the Coinbase’s share went live on Nasdaq.
The world’s largest cryptocurrency is currently consolidating in the $55,000 region following a sharp rejection from the $57.2k level of resistance on Tuesday evening.
Whilst several analysts are predicting that this is the final pullback before another charge to a new all-time high, the four-hour exponential moving average formation demonstrates a severe lack of momentum.
The four-hour 50 EMA crossed the 200 EMA to the upside on October 9 when Bitcoin was worth $11,150 in what is called a “golden cross”. Since then, Bitcoin has embarked on a quite incredible bull market with a 480% rally to the upside.
During which the 50 EMA has failed to cross back below the 200 EMA as the uptrend continued to form new highs at $40,000, $58,500, $61,800 and more recently $65,000.
However, the 50 EMA is now aggressively angled to the downside, with it being just $600 away from the 200 EMA at $57,550. A cross will likely take place today unless Bitcoin can surge to above $57,500 before the next two candle closures.
Previous four-hour death crosses have led to a series of major corrections in the price of Bitcoin, with a cross in November 2019 preceding a 25% pullback while the subsequent cross in February 2020 came before a 63% correction.
It’s worth noting that the death cross is not confirmed until the 50 EMA has closed a four-hour candle below the 200 EMA, with a potential move expected to happen over the coming weeks.
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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.