FameEX Hot Topics | Bitcoin ‘Death Crosses’ Stack Up, Pointing To $92K Price Test

Bitcoin may be poised for a downward shift, with technical patterns and market data pointing toward a potential price shakeout. Analysis from Material Indicators, published on February 17, suggests that Bitcoin’s price could soon break out of its current tight trading range, potentially heading lower as key moving averages on daily charts flash bearish signals.

One significant pattern catching analysts’ attention is the emergence of “death crosses” on Bitcoin’s chart. A death cross happens when a short-term moving average dips below a longer-term moving average, often signaling weakened momentum and hinting at a prolonged downtrend. Despite this bearish setup, Material Indicators noted a silver lining: bid liquidity appearing in order books could help limit volatility. Their FireCharts data reveals that local support stands at $95,000, with secondary support at $92,000. Should Bitcoin test these levels, it may confirm the market’s foundation and create entry opportunities for long-term investors.

Keith Alan, co-founder of Material Indicators, characterized the potential dip as a healthy market “shakeout.” Rather than being alarmed, Alan said he views this potential pullback as a chance to strengthen his long-term Bitcoin position. His advice to market participants is to maintain patience, adhere to their investment plans, and not overreact to short-term volatility. This measured approach is particularly relevant as other market players have been trimming Bitcoin exposure, though retail investors have shown resilience by holding firm.

Adding to the current market uncertainty, trading volumes have declined recently, in part due to the U.S. President’s Day holiday. With Wall Street taking a break, institutional activity was minimal, leaving short-term trends largely unaffected. QCP Capital, a trading firm, reported that implied volatility continued to drift lower, with seven-day realized volatility reaching 36%. Without major cryptocurrency-specific events on the horizon, Bitcoin’s price movements appear increasingly tied to broader macroeconomic trends. Correlations between Bitcoin and equity markets remain significant, with rising inflation pressures also weighing on risk assets.

Despite these headwinds, Bitcoin has displayed relative stability in the face of challenging macro conditions. QCP Capital observed that open interest in crypto options remains low, reflecting a cautious market waiting for clear policy signals. Rather than reacting to mere positive sentiment, the market seems to be waiting for tangible policy changes before making any decisive moves.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.