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Bitcoin (BTC), the largest cryptocurrency by market capitalization, has shown a "death cross" on its short-term charts. This comes after a huge sell-off in the cryptocurrency market, with Bitcoin falling to a low of $49,050 during yesterday's trading session.
As of early Monday, over $370 billion had been erased from the market capitalization of all crypto assets over 24 hours, with Bitcoin experiencing its greatest single-day drop in three years. Much of the sell-off was linked to a broader market rout, with equities falling around the world.
A death cross occurs when a short-term moving average crosses below a long-term moving average, typically signaling potential bearish momentum.
In Bitcoin's case, this pattern has emerged on the four-hour chart as the 50-hour moving average has crossed below the 200-hour moving average, an indication that many market analysts view as a bearish signal.
Crypto market recovers
On Tuesday, cryptocurrencies recovered some of the losses from the previous day. Bitcoin is regaining ground after plummeting to its lowest level in six months on Monday during the first big test of the recently launched crypto exchange-traded funds.
At the time of writing, Bitcoin was up 9% in the last 24 hours to $54,851, according to CoinMarketCap data.
On-chain analytics firm IntoTheBlock highlighted key levels to watch as the Bitcoin price shows signs of recovery.
Bitcoin is showing minor signs of recovery, gaining ~2% in the last hour. Here are some key levels to watch:
— IntoTheBlock (@intotheblock) August 5, 2024
Upside: Resistance is fairly distributed, but two levels with notable historic volume stand out: $55.5k and $60.5k.
Downside: Significant demand is concentrated below… pic.twitter.com/UVuWwEs43L
According to IntoTheBlock, on the upside, resistance is fairly distributed, but two price levels with notable historic volume stand out, which are $55,500 and $60,500.
On the other hand, if declines continue, a significant demand level is concentrated below $50,000 with strong support anticipated around $47,500.
Meanwhile, Bitcoin wallets holding between 1,000 and 10,000 BTC showed confidence during the recent dip, consistently increasing their holdings as prices fell. On the other hand, wallets with less than 1 BTC showed weak hands, with the most substantial decrease in holdings during yesterday's market downturn.