Bitcoin prices have dropped again and there is a huge fear that the big bubble is about to burst. A lot of traders are currently being spooked which is setting the price drop off again. This is leading to a lot of people wondering, why is it crashing?
A drop rocked the world of cryptocurrency last night and now it is falling lower and lower. As of this writing, bitcoin currently stands at $7,600 per coin. This has fallen by nearly 4% over the last 24 hours. The bearish trend certainly has a lot of investors worried as the coin value gets ever closer to the Death Cross.
The Death Cross is known as being a point in a stock’s life- this happens when the 50-day average crosses below the 200-day average. This usually leads to a bearish trend, so it is understandable why a lot of investors would be concerned about this. In short, the price of Bitcoin has fallen in the last 50 days as much as it normally would in 200 days. The Death Cross ultimately means that there is no potential left in the stock because a lot of people see the stock as being incredibly unreliable. For bitcoin, that moment is coming closer and closer and this is causing a lot of panic on the market.
A Death Cross could mean that sellers and investors start selling off what they have, and if this happens then the value could plummet to $2,800. When you talk about Bitcoin, it’s very important to remember that there isn’t exactly any history to go off and there aren’t any long-term trends either.
That being said, any time the 50-day cross goes over the 200 mark, it’s a warning, and a big one. When you pair that with the thought that it has been trending at a good rate since the launch of futures, you have an even bigger problem on your hands.
Cryptocurrency is still under a lot of scrutiny and a lot of people don’t really like the way that it operates. The continued Facebook data saga isn’t helping, and a lot of regulation threats are present as well.
The bearish trend really has caused a lot of uncertainty to the world of cryptocurrency and it has also made a lot of investors wary about taking that next step. There is also a rise in rival coins and there is a concern about the full potential it can now reach.
It’s not all gloom and doom for the BTC however. The currency has already been close to the Death Cross. You may remember this in 2015, and since then, it valiantly rallied back. Analysts have suggested that this drop may result in an uptrend if investors are able to trust in it and keep hold of what they have. The bearish trend could actually cause an uptrend if certain influences were to happen.
With the current situation, the bearish situation is much more likely to tail off before it hits the Death Cross and this is because the drop it is going to take to reach it is still a significant one. It has to drop by a total of $14,000, or from $20,000 to $6,000 if the 50-day MA is to go close to the 200-day MA.
Bitcoin has been able to come back faster and higher than ever before every time it has gotten to this point. This shows that the whole thing could actually be a positive experience, but if it does happen to fall then it could result in a Death Cross. Investors would be more likely to hold on and oversell it when compared, as this is what happened in 2015.