The Coming Bitcoin Death CrossThe Bitcoin daily price chart will likely show a death cross within the next week. In the above chart, I have extended both the 50-day and 200-day SMAs based on their current trajectory. The result shows that they will intersect on or around the 7th of April.
Even though the death cross seems inevitable, does that necessarily mean that the bullish phase of this market cycle is over? In my opinion, it is still a little too early to make that call. We only have to look back at the previous market cycle for an example where a death cross didn't lead to the death of the market cycle.
Looking at the chart above, we can see that Bitcoin experienced a death cross following the first peak in April 2021. About three months later, a golden cross formed, which led to the final market cycle peak in November 2021. We can also see that in this current market cycle, there have been two other instances where death crosses have occurred. Both were followed two to three months later by golden crosses, which ended consolidation phases and led to substantial price increases over the following months.
As I see it, there are now two possible scenarios for this market cycle.
The first is that Bitcoin's price peak on January 20th was the market cycle peak, and Bitcoin is now in the bear market phase of this market cycle.
The second scenario is that the peak for this market cycle has not yet occurred, and we will we will see a similar outcome as the two previous death cross-golden cross occurrences earlier in this market cycle.
I am also still watching the Stochastic RSI indicator on the monthly chart. What I have noticed is that when the Stochastic RSI reading has dropped substantially below the "20" level, that has signaled that the previous price peak was the peak of that market cycle.
Looking at this chart, we can see that the Stochastic RSI is currently at 11.31 however, this can change. If the price of BTC can substantially increase over the next few weeks, it is possible that when April's monthly candle closes, the Stochastic RSI reading could be back over the "20" level.
If, however, the Stochastic RSI reading is substantially below the "20" level when the April candle closes, then based on previous history, I would have to conclude that Bitcoin's price peak on January 20th was the market cycle peak.
I am trying to remain hopeful that the bullish phase of this market cycle will resume at some point while still keeping an open mind to other possibilities.
What are your thoughts? Do you agree, or is my analysis flawed?
