Bitcoin Price at Risk of Crash if it Fails to Hold $62,000 amid Death Cross Signal
Crypto analyst Benjamin Cowen has warned about the potential impact of the death cross indicator on Bitcoin’s price. The $62,000 level has now become crucial for Bitcoin to avoid another price crash. Cowen emphasizes that if Bitcoin fails to hold above $62,000 heading into the death cross, it is at risk of dropping lower. Despite recovering to $62,000 after a price crash below $50,000, the death cross threatens lower prices for the flagship cryptocurrency.
The death cross, occurring when the 50-day moving average falls below the 200-day moving average, is viewed as bearish and suggests a prolonged period of declining prices. Currently, Bitcoin’s 50-day moving average sits around $62,000, making it crucial for Bitcoin to reclaim and maintain this level to prevent further price declines. A drop below the psychological level of $60,000 is already within sight.
Drawing comparisons to a death cross that occurred in 2019, Cowen notes that it marked a local top for Bitcoin, with subsequent lower highs and a bearish price trend for about four months. He acknowledges that this time could be different, as indicators often play out differently in various cycle phases. However, Cowen also suggests that September, historically the worst month for Bitcoin, could see the flagship cryptocurrency endure a downtrend.
Cowen emphasizes that Bitcoin’s future course will mainly depend on external factors, such as inflation and the labor market, rather than prevailing conditions in the crypto market. He highlights the macroeconomic impact on Bitcoin, citing the crypto crash on August 5 due to fears of a recession. The US Federal Reserve’s reluctance to cut interest rates to combat inflation has led to projections of a potential recession in the US economy. Additionally, concerns raised by higher-than-expected unemployment rates in the July US job report have also influenced investor sentiment towards risk assets like Bitcoin.
In summary, the death cross indicator poses a threat to Bitcoin’s price, with $62,000 playing a crucial role in avoiding further declines. The macroeconomic environment, including inflation and the labor market, will heavily influence Bitcoin’s future trajectory.