Bitcoin

All is not good in the cryptocurrency sphere. Earlier this year, Elon Musk, the CEO of Tesla and the constant booster of Bitcoin, tweeted that the automotive vehicle maker won’t accept bitcoin payments anymore. He also added a chart that cited the amount of energy consumption bitcoin mining is taking, destroying the climate accords. Not too long after, China, the largest bitcoin mining country in the world, implemented a total ban on bitcoin mining. Ever since digital currency underwent an inevitable crisis, it is facing back-to-back hits. Bitcoin price has drastically tumbled in recent days, pushing the famous cryptocurrency towards a ‘death cross.’

Bitcoin, the world’s most adopted cryptocurrency, has experienced ups and downs throughout its journey. Volatility is not a new thing. To be precise, bitcoin has also faced six such ‘death cross’ in the past years. However, crypto enthusiasts say this could be different from the previous ones. Because this time, the graph is taking a steep dip towards the bottom. The recent unleashing of the bit-coin chart explaining the dip in the market has brought further worry to crypto investors. Bitcoin has lost over 20% in the last six days and is down by half from its April peak of almost US$65,000. If the bitcoin market breaks its May 19 low of US$30,066, then it will bring an array of negative impact to the cryptocurrency sphere. Unfortunately, it is not just bit-coin that is facing the downside. Other cryptocurrencies like Ethereum, Litecoin, and Dogecoin are also seeing a dip of around 20% in the past week.

So, who was the first to signal about the approach of ‘death cross?’ Fred Ehrsam, the co-founder of Coinbase, the world’s largest crypto exchange, warned that a ‘death cross’ is underway. He said that the death cross could bring a ray of darkness where most crypto assets “won’t work” and 90% of all non-fungible tokens (NFTs) will fail in three to five years. Besides, many popular crypto enthusiasts also tweeted about the looming ‘death cross.’ However, supporters also put out their opinion citing that this is not the first time such a thing has happened and Bit-coin has successfully come out of six death crosses in the past. Earlier, bit-coin faced a major plunge of 60% in March 2020. Fortunately, digital currency made a remarkable comeback with a 1000% price spike over the next year.

What is a death cross?

A death cross is a technical chart that indicates an upcoming potential sell-off. It is a phenomenon where the short term average price of a stock drops below the long term average, usually measured by comparing the 50-day and the 200-day average. In the past, the death cross has led to stock market crashes in 1929, 1938, 1974, and 2008.

So, what are the crypto investors hoping for?

As mentioned earlier, this is not the first time bitcoin is facing a ‘death cross.’ Not just bitcoin, even other companies like Dow Jones Industries have experienced 84 death crosses since 1929. The positive side is that they have come out of the den unscathed. Therefore, bitcoin investors still see the light at the end of the tunnel and hope for positive outcomes. A crypto enthusiast called Sultan has discussed with his followers on the bitcoin death cross and pointed that a ‘death cross’ could mean that the digital currency market is already out of the worst. The crypto investors are also anticipating a double top emergence like how it happened in 2013. Although no one knows what is the bag for bitcoin investors, they are keeping their fingers crossed and hope for the best in the upcoming days and months.