Bitcoin Death Cross Sparks Fears of Major Price Drop

A recent development on Bitcoin's 3-day chart has sent shockwaves through the cryptocurrency market, as a historic 'death cross' formation appears to be underway. The death cross, which occurs when a short-term moving average falls below a long-term moving average, is a key bearish indicator in the Bitcoin market.

Historical data suggests that this pattern has consistently preceded significant price drawdowns in the past. In 2013, for example, Bitcoin crashed by 72% before the death cross appeared, followed by an additional 52% price fall. Similarly, in 2017, Bitcoin declined by 67% from its market peak before the appearance of the death cross, which triggered an additional 50% crash.

More recently, a similar pattern was observed in May 2022, when Bitcoin was down by 58% from its cycle top and experienced another 46% devaluation. According to analyst Ali Martinez, this formation on the 3-day chart indicates potential major downside for Bitcoin, with a possible additional drop of around 49% predicted.