One analyst explained how Bitcoin is forming a death cross and a TD sell signal, which could lead to potential declines in these targets.
Bitcoin appears to be in trouble as the 12-hour chart is forming two bearish signals
In new mail On Day X, analyst Ali discussed two recently formed signals on Bitcoin's 12-hour chart. The first is a “death cross,” which occurs when an asset's short-term simple moving average (SMA) drops below its long-term SMA.
Regarding the death cross, the 50-day and 100-day simple moving averages offset the short-term and long-term trend lines. Historically, such formations were considered bearish signals, with the price likely to suffer once the pattern was confirmed.
Another signal that has emerged for the cryptocurrency involves the Tom Demark (TD) sequence. This indicator is commonly used to find the locations of potential tops and bottoms in the price of any asset.
The TD sequence consists of two phases: “Setup” and “Countdown.” The first stage, setup, is said to be complete once the asset passes through nine candles of the same polarity. After these nine candles, the price may have reached a potential reversal point.
Of course, if the candles in the setup formation are red, the signal will be buy, while if the prevailing trend is to the upside, the reversal will be down.
Once setup is complete, the countdown phase begins. This stage works exactly like the setup, except that the candles are counted to thirteen instead of nine. After the countdown ends, it can be assumed that the commodity has reached another potential high/low.
Now, here's the chart Ali shared that highlights how signals around both technical analysis patterns have appeared in Bitcoin's 12-hour price recently:
The two signals that the 12-hour BTC price has formed in recent days | Source: @ali_charts on X
As can be seen in the chart, the 12-hour Bitcoin price first witnessed a death cross formation with the 50-day SMA moving below the 100-day SMA. Next, notice the TD serial setup completes, with the indicator signaling a downtrend reversal.
Since the emergence of this double bearish pattern, Bitcoin has trended lower, suggesting that these signals may already be in effect. “If Bitcoin “The stock is below $63,300 and is bracing for potential declines to $61,000 or even $59,000,” the analyst says.
From the cryptocurrency's current price, a potential pullback to the first of these targets would mean a 4.6% decline, while a single pullback to the last level could indicate a decline of around 8%.
Bitcoin price
So far, Bitcoin has managed to prevent a drop below the $63,300 target mentioned by the analyst, as it is currently floating around $64,000.
Looks like the price of the coin has lost its earlier recovery during the past 24 hours | Source: BTCUSD on TradingView
Featured image from Shutterstock, charts from TradingView.com
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