Hello traders everywhere. Technical traders and the market in general, are closely watching Bitcoin heading into next week. The reason for concern, a looming Death cross. As I noted earlier in the week, Bitcoin's 50-Day moving average has dropped to the closest proximity to its 200-Day moving average in nine months. The last time it crossed below that level was in 2015 where it remained for ten months before breaking out.
The "death cross" pattern occurs when the 50-Day moving average drops below the 200-Day moving average. The idea is that this cross marks the spot where a shorter-term decline is turning into a longer-term downtrend.
Bitcoin has come under growing pressure recently with Google announcing that they will not only ban all ads for cryptocurrencies, including bitcoin and initial coin offerings (ICOs), they will also ban cryptocurrency exchanges and wallets, as it seeks to "tackle emerging threats."
Regulation is also becoming a growing concern for Bitcoin, and the cryptocurrency space as nations around the world are imposing stricter regulations on the use and mining of cryptocurrencies.
Key Levels To Watch Next Week:
S&P 500 (CME:SP500): 2,647.32
Dow (INDEX:DJI): 24,217.76
NASDAQ (NASDAQ:COMP): 7,084.83
Gold (NYMEX:GC.G18.E): 1,330.50
Crude Oil (NYMEX:CL.J18.E): 60.11
U.S. Dollar (NYBOT:DX.H18.E): 89.33
Bitcoin (CME:BRTI): 11,662.32
Every Success,
Jeremy Lutz
INO.com and MarketClub.com
"The idea is that this cross marks the spot where a shorter-term decline is turning into a longer-term downtrend." - very often this idea turns out to be wrong. It may not be wrong in this case, but there is no reason whatsoever to ascribe any meaningfulness to a crossover between the 50 and 200 day moving averages (particularly not if "all eyes" are on it). Why not some other arbitrarily picked moving averages? Besides, one could just as well argue that the so-called "death cross" is a sign that the underlying instrument is oversold and should be purchased. Or one could just flip a coin. Both would be at least as sensible as the proposed notion that any information about the long term trend is conveyed. Besides, last I looked BTC was down some 60% from its highs - who needs "trend confirmation" at this point? Clearly it is a bear market of major proportions already.