Bitcoin is showing green numbers for the first time in a while. However, after the recent weeks of declines, many traders remain cautious. Analysts are seeing technical signals that don’t inspire optimism. One of these is the so-called “death cross,” a pattern that in previous cycles preceded steep declines.
Bitcoin’s Death Cross #
The first bearish signal came when bitcoin dropped below an important threshold: the 50-week moving average. This level is seen by analysts as a kind of foundation for the macro trend. If the price falls below it, it could indicate a structural negative shift.
Analyst Rekt Capital followed that zone and said in a post on X that bitcoin “needed to quickly reclaim this level to maintain the larger trend.” That didn’t happen. In fact, the price fell further and also slipped below the 100-week moving average.
The signal that really sparked discussion is the death cross on the daily chart. This occurs when the 50-day SMA drops below the 200-day SMA. This shows that the short-term trend is weakening compared to the long-term trend. In previous bitcoin seasons, this was followed by significant declines. Analyst Mister Crypto commented on this:
“Why would it be different this time?”
In 2022, bitcoin fell 64 percent after a death cross. In 2018, the decline reached 67 percent, and in 2014 even 71 percent. Of course, past performance is no guarantee for the future, but this pattern has built a reputation that many traders cannot ignore. The SuperTrend indicator on the weekly chart is also now red, again a signal that in previous cycles often marked the beginning of longer periods of weakness.
Loss-Taking Sellers Dominate #
Besides the technical signals, there’s something else that stands out: more and more investors are selling their bitcoins at a loss. Data shows that realized losses rose to over €700 million on a seven-day basis, something we only saw during the FTX collapse. Especially short-term traders seem to be panicking, with their bitcoins being sold off en masse.
Glassnode calls this a clear phase of capitulation, where recent buyers give up and exit before the damage gets worse. CryptoQuant analyst IT Tech explains that such a wave of loss-taking sales can sometimes form a local bottom, but only if the price then quickly recovers towards the average cost basis of those sellers. If that doesn’t happen, it could actually be the beginning of a longer period of declines.