The cryptocurrency market experienced a downward trend on Monday, as Bitcoin, Ethereum, and XRP traded lower. This decline was attributed to FTX-related news, which led to a slump in the price of Solana.
Analysts are now pointing to a potential Death Cross for Bitcoin, suggesting that this could be bad news for the overall market. The Death Cross refers to a technical analysis pattern where the short-term moving average of a cryptocurrency crosses below its long-term moving average, indicating a potential bearish signal.
Bitcoin, which had shown some bullish momentum last week, is now retreating below $26,000 and could reach key support levels near $25,000. Similarly, Ethereum is struggling to maintain prices near $1,600, while XRP, after losing all its gains from the July court victory, is testing support below $0.50.
Analysts Share Price Outlook for BTC
Bitcoin is approaching its next halving, which is seen as a key bullish catalyst for an anticipated bull market. However, the outlook for the past few weeks has been predominantly negative following the drop from near $30,000.
Crypto lawyer John E. Deaton questioned whether the market had already hit its bottom. He speculated that if it hadn’t, Bitcoin could see a massive decline of 30-40%, potentially revisiting $15,000 before possibly surging to $50,000. The selling pressure from FTX could impact not only altcoins like Solana but also the broader market.
Another analyst, Ali Martinez, highlighted a possible Death Cross formation on the Bitcoin daily chart. If the price drops below the $25,200 support level, it could confirm a deeper correction for the benchmark cryptocurrency.
XRP Price Below $0.50
The technical picture for XRP shows a descending triangle pattern on the daily chart, which has persisted for several weeks. With sellers having an upper hand near $0.47, it is likely that XRP’s price will retest the $0.44 support zone. Further decline could potentially take XRP to $0.35.
What is a Death Cross in cryptocurrency?
A Death Cross is a technical analysis pattern that occurs when the short-term moving average of a cryptocurrency crosses below its long-term moving average. This is generally seen as a bearish signal, indicating a potential downward trend in the price.
What is the significance of Bitcoin’s halving?
Bitcoin halving is an event that occurs approximately every four years, where the number of new Bitcoins mined per block is halved. This event is significant because it reduces the rate at which new Bitcoins enter circulation, leading to potential scarcity and increasing demand, which may result in an increase in Bitcoin’s price.
Why did the cryptocurrency market decline on Monday?
The decline in the cryptocurrency market on Monday was attributed to FTX-related news, which caused a slump in the price of Solana. This negative sentiment spilled over to other major cryptocurrencies like Bitcoin, Ethereum, and XRP, leading to a general decline in the market.
What is the descending triangle pattern?
The descending triangle pattern is a technical analysis pattern that forms when the price of an asset creates lower highs and a horizontal support level. This pattern is considered bearish and suggests that the price is more likely to break below the support level and continue its downward trend.
What could trigger a positive flip in the technical picture for cryptocurrencies?
A positive catalyst such as positive regulatory news, institutional adoption, or a major partnership announcement could potentially trigger a positive flip in the technical picture for cryptocurrencies. These events could lead to increased buying pressure and a bullish trend reversal.
This article was originally published on September 11, 2023.