It looks like the BTC/USD pair is forming the so-called “death cross” on the daily price chart. Traders regard this pattern as a bearish sign. This pattern is formed for the second time in five months. In 2019, the “death cross” caused Bitcoin's price to fall by 36%; in 2018, the price of Bitcoin fell by 55% after the formation of the “death cross”.
This pattern will work if the 20-day moving average crosses down the 50-day moving average. And if the trend continues, it will happen in one of the next sessions. This can happen when the price of Bitcoin drops below 15% from its 2020 maximum, $10522.
Yesterday, Bitcoin tried to recover and climbed to the $8900 area. But today, the price is under pressure and Bitcoin is trading at around $8750.
However, traders take into account the "death cross" pattern not only on downtrends, but also on uptrends. In 2019, the 20-day moving average crosses up the 50-day moving average, the price of Bitcoin rose by 251%. However, many traders associate that growth with China FOMO.
In any case, moving averages are often leading indicators for the price of Bitcoin. And this time, they can lower the price of Bitcoin to its minimum in the level of $6500. With that said, a Bitcoin movement below $8000 could confirm the effect of the Death Cross on the medium-term sentiment dynamics. Rollback, on the other hand, could lead to Bitcoin reaching $9500 as an intermediate growth target.