According to the latest analysis, Bitcoin can overcome the impending “death cross” if it flips $62,000 as support.
In an August 9 X-only thread, popular trader Benjamin Cowen suggested a way for bulls to avoid a Bitcoin (BTC) price crash, based on history.
$62,000 Becomes Key BTC Price Resistance Hurdle
The recent BTC price action has brought BTC/USD to the threshold of another moving average crossover, classically known as a “death cross.”
This includes the downward sloping 50-day simple moving average (SMA) crossing below its 200-day equivalent. The current 50-day and 200-day SMAs are 61,998 and 91,882, respectively, according to data from Cointelegraph Markets Pro and TradingView.
The dead cross gets its name from the assumption that the completion of the crossover would serve as an advance warning of a BTC price decline.
But as Cowen shows, results are often mixed. In fact, the last daily death cross of 2023 blocked the upside.
“In 2023, BTC started a rally right after the dead cross. It then broke above the 50D SMA and held it as support before moving higher,” he noted.
On the other hand, in 2019, 2021, and 2022, there was a brief upturn in the Death Cross event itself, but it eventually led to the expected result of a loss.
“The sustainability of this move will probably depend on BTC first breaking above the 50D SMA ($62,000) and then holding it as support like it did in 2023,” Cowen concluded.
He added that if that fails, the downtrend could return until there is a significant change in macroeconomic conditions. Specifically, the U.S. Federal Reserve needs to make a “sufficient pivot” on interest rates to support cryptocurrencies and risky assets.
Bitcoin Open Trading Volume Slumps Amid BTC Price Rebound
BTC/USD continued its recovery throughout the day, reaching a close of $62,775 on the previous day before reconsolidating slightly at the time of writing.
Related: Bitcoin Recovers $62,000, Forming ‘Giant Hammer’ on Price Chart
Market experts have noted that even though it has been a few days since Bitcoin suffered one of the largest crashes in history, open interest in the futures market has not rebounded despite the price rally.
“This Bitcoin bounce was primarily short positions covering positions in the futures market,” Julio Moreno, a contributor to on-chain analytics platform CryptoQuant, wrote in part of X’s response.
Meanwhile, co-contributor Axel Adler Jr. pointed to the upper $62,000 level as a key resistance level, while key support remains below this week’s six-month low of $50,000.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.