‘Death Cross’ Dampens $8.8K Hopes as Bitcoin Price Recovery Stall
price (BTC) is down around 1% on Monday, following a strong close to the week on Sunday with a move from lows of $7,875 to highs of over $8,300. The altcoins also bounced around 2% yesterday and have also failed to follow through today.
Despite the strong close to the week, Bitcoin closed the week down around half a percent and the altcoins a similar amount. With an encouraging bounce in the twelfth hour, we examine what this may mean going into the week and if the updraft in the price action is likely to continue.
Bitcoin continues to trade below the 20-week moving average (WMA), while supported by the 100-WMA and the previous weekly support. The 100-WMA will rapidly begin its decline next week and Bitcoin shows limited interest in retesting key prior support of $9,500 at this point.
The weekly Moving Average Confluence Divergence (MACD) continues to trend down, as does the Relative Strength Index (RSI). The MACD histogram is showing signs of a higher low and the RSI is testing the downtrend. This implies that Bitcoin, although in a downtrend, could be in for an attempt to change that somewhat going into the final ten days of October.
A close above $8,305 would mean avoiding a fourth consecutive monthly red candle, which has never occurred previously in a bull market and would be a relief for the bulls.
The daily Bitcoin chart shows that the digital asset has an impending death cross of the 200-week and 50-week moving averages. As the name would suggest, this implies that Bitcoin will be likely to suffer more downside, although death and golden crosses are more useful on the weekly chart. The death cross is occurring at the descending multi-month resistance adding weight to the idea that Bitcoin is up against bearish momentum.
Historically, the daily death crosses have been met with a rally into the cross, contrary to the market sentiment at the time; but typically following the rally there has been a continuation of the downtrend.
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