Bitcoin's 50-week simple moving average (SMA) is about to cross below its 100-week SMA, forming a so-called 'bear cross' or 'death cross.' While this is typically seen as bearish, the signal has acted as a contrarian indicator in the past. In bitcoin's history, three such crosses have marked market bottoms and preceded significant multi-year bull runs. The impending cross reflects the roughly 50% price decline from $126,000 in October to near $60,000. Critics note that three occurrences are insufficient for a definitive pattern, and the moving averages are inherently lagging. However, by the time the cross occurs, market froth is often gone, and capitulation has already taken place. The indicator suggests limited downside and a potential bottom near current levels. As of writing, bitcoin trades at $62,400, with the 50-week SMA at $89,771 and the 100-week at $88,397. External factors such as bond yields, ETF flows, and corporate actions remain critical.

Key facts

• Bitcoin's 50-week SMA set to cross below 100-week SMA forming a bear cross.
• Three prior bear crosses in bitcoin history each marked a market bottom.
• Bear cross reflects the 50% price drop from October highs.
• Indicator suggests limited downside and a potential bottom near current levels.
• External factors like bond yields and ETF flows remain important.

KeyAudit data perspective