If you have been following recent cryptocurrency news, you have heard about the crushing market and some huge losses people have been facing. It all started weeks ago when the United States Index report was released. This report showed that the United States dollar had the most power over other liquid assets. Coupled with other factors, such as inflation and an unstable market, it caused more challenges for cryptocurrency investors globally.
These impacts continue as economists and traders gear up for the worst. According to recent reports from experts, Bitcoin investors should be prepared for a massive market crash in the next few weeks. The experts have studied the market and noticed most signs of a death cross that might happen. Many people who have not been in the cryptocurrency and Forex trading market for long might not be familiar with the term death cross. A death cross is an economic term used to show the information on a chart. The chart might represent a stock, currency, bond, or cryptocurrency token. The death cross forms an X-shaped figure as two lines cross each other. On the chart, two lines cross each other, one representing short-term moving averages and another line representing long-term moving averages.
In the death cross, the short-term moving average line goes below the long-term moving middle line, which spells doom to many investors. In the history of Bitcoin, the token has gone through two death crosses. If history has anything to teach, nobody would want Bitcoin to go through the same thing again. In the last two death crosses, some of the impacts had significant effects on many investors and caused many people a lot of money. Some horrific results included the price of a Bitcoin tanking, leading to a massive loss of value. Considering that the number of investors and amount of money spent on Bitcoin has increased in the last few years, the amount of money people may lose if this happens again is enormous. If the specialists are right and Bitcoin experiences another death cross, this might blow Bitcoin investment.
The death cross is a huge factor because when the short-term and the long-term moving average cross each other, it predicts or shows that the number of people selling off their assets is increasing or has gone over the number of people that are willing to buy the asset. According to the equilibrium rule, when there’s more supply than demand, the price has to go down as more suppliers struggle to find a buyer for their product. Many investors are hoping for the best in the next few weeks. Although this is the case, Bitcoin has fought over the last few weeks. As the value has plummeted in other cryptocurrency tokens, Bitcoin has managed to hold its value. It might be because many countries and organizations are adopting cryptocurrency, mainly Bitcoin, to serve significant roles in their operations. The Central African Republic announced they would start using Bitcoin as a legal tender for the transaction, while Gucci will begin accepting Bitcoin for their products. Such activities might be the saving grace Bitcoin needs to avoid the Death cross.