Benjamin Cowen, a cryptocurrency analyst, recently investigated the implications of the death cross indicator, which has once again appeared on Bitcoin’s chart. As a result of this indicator, the price level of $62,000 has become extremely significant for Bitcoin to forestall yet another significant price drop.
Cowen expressed his concern about the possibility that Bitcoin’s price could continue to fall if it does not maintain a position above $62,000 as it approaches the Death Cross in a video that he uploaded to his YouTube channel and shared with his audience. As a result of its recovery from the price drop that occurred on August 5 below $50,000, the value of Bitcoin skyrocketed to an astounding $62,000. The death cross was triggered by the surge to $62,000, which currently poses a risk of declining prices for the cryptocurrency that is presently in the lead.
The Impact of the Death Cross on Bitcoin’s Price
Generally speaking, the death cross indicator is considered to be a bearish signal, which indicates that the asset in question may be subject to a prolonged period of declining prices in the not-too-distant future. This phenomenon takes place when the moving average for the 50 days falls below the moving average for the 200 days.
Cowen reports that the 50-day moving average for Bitcoin is currently at approximately $62,000. As a result, it is of the utmost importance that Bitcoin reclaim and continue to hold a position that is higher than the price threshold of $62,000 in the not-too-distant future. In the event that this is not done, additional price reductions will likely occur, with the possibility of prices falling below the significant $60,000 mark that is already within sight. To shed light on Bitcoin’s potential future actions, the crypto analyst made it a point to compare the Death Cross event that occurred in 2019 to the current situation.
In 2019, the Death Cross marked a significant turning point for the cryptocurrency considered to be the flagship. Following this event, it went through a sequence of lower highs and remained in a bearish state for approximately four months.
Nevertheless, Cowen acknowledged that the current situation may unfold distinctly, pointing out that similar indicators tend to manifest in a “somewhat unique manner” during various stages of the cycle.
It is also possible that the timing of this Death Cross will provide useful information regarding Bitcoin’s possible future. Cowen observed that September is typically the least favorable month for Bitcoin, which indicated that the leading cryptocurrency may experience a downward trend that could potentially continue into September.
Ultimately, It All Comes Down to the Bigger Picture
The current state of the cryptocurrency market will not be the primary factor that will determine the future of Bitcoin, according to Cowen, who disclosed that external factors will be the primary influence. Inflation and the employment landscape are two examples of general economic factors that are included in this category. There is a widespread consensus that the macroeconomic factors played a significant role in the crash of the cryptocurrency market on August 5. This occurred at a time when concerns about an imminent recession were intensifying.
To this point, the Federal Reserve of the United States has refrained from lowering interest rates in an effort to bring inflation down to the 2% level that it has set as its target. The fact that they are unwilling to do so has led to predictions that the economy of the United States may be on the verge of experiencing a recession.
In addition, the job reports for July in the United States indicated that market participants have causes for concern because the unemployment rate was higher than anticipated. The macro perspective has a significant impact on Bitcoin and the cryptocurrency market because it is an essential factor in determining the amount of money that investors are willing to put into high-risk assets. As a result, the macro perspective significantly affects Bitcoin and the cryptocurrency market.
