By Samuel Indyk
Investing.com – The price of Bitcoin edged lower on Friday morning as the dreaded ‘death cross’ chart pattern was finally formed. A ‘death cross’ occurs when a short-term moving average (in this case the 50-day moving average) drops below a long-term moving average (the 200-day moving average).
The chart pattern is used by technical analysts to signal a bearish outlook. The last time Bitcoin formed a ‘death cross’ was on 18th June last year. Bitcoin hit a low three days later and remained subdued until 21st July before the price began to trade higher.
Today’s decline in Bitcoin and most other major cryptocurrencies also comes following a late sell-off in US tech stocks on Thursday. The tech-heavy Nasdaq 100 ended Thursday’s trading session lower by 2.5%, wiping out the gains seen over the previous three trading sessions.
Technical Picture
If the ‘death cross’ confirms further bearish momentum, the next level of major support to the downside is the psychological $40,000 level. A firm break below there opens the door to the September low near $39,700.
To the upside, resistance is seen at around $44,200 which is the 61.8% fib retracement level from the July low to the record high from November.
Above there and the 50-day moving average ($48,420) and the 200-day moving average ($48,438) could be the next levels of resistance.
Altcoins
It wasn’t all doom and gloom for the industry. Dogecoin outperformed after Tesla (NASDAQ:TSLA) announced it has begun accepting the meme-based token for some merchandise on its website. Dogecoin trades higher by over 13% in the last 24 hours.
Other cryptocurrencies in the top 10 were lower with Ethereum down 3.1%, BNB down 1.5% and Solana down 4.1%.