One analyst has explained how bitcoin is forming a death cross and a TD sell signal, which may lead to potential declines in these targets.
bitcoin appears to be in trouble as 12-hour chart forms two bearish signals
in a new twitter.com/ali_charts/status/1783418598062465362″ target=”_blank” rel=”nofollow”>mail On x, analyst Ali analyzed two signals that recently formed on bitcoin's 12-hour chart. The first of these is a “death cross,” which occurs when an asset's short-term simple moving average (SMA) falls below its long-term SMA.
As for the death cross, the 50-day and 100-day SMAs offset the short- and long-term trend lines. Historically, these formations have been considered bearish signals, and the price could suffer once the pattern is confirmed.
The other signal that has appeared for the cryptocurrency involves the Tom Demark (TD) Sequential. This indicator is popularly used to find locations of probable highs and lows in the price of any asset.
TD Sequential has two phases: “setup” and “countdown.” The first phase, setup, is said to be completed once the asset has passed through nine candles of the same polarity. After these nine candles, the price may have reached a probable reversal point.
Naturally, if the candles in the setup formation were red, then the signal would be buy, while if the prevailing trend was bullish, the reversal would be bearish.
Once the setup is complete, the countdown phase begins. This phase works very similar to the setup, except that the candles are counted to thirteen instead of nine. Once the countdown is over, it can be assumed that the commodity has reached another potential high or low.
Now, here is the chart shared by Ali highlighting how signals on both technical analysis patterns have recently been observed in the 12-hour price of bitcoin:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/04/Bitcoin-forms-Death-Cross-and-TD-9-sell-signal-Prepared-for.jpeg" alt="bitcoin Death Cross and TD-9 Sale” width=”2125″ height=”1443″ loading=”lazy”/>
The two signals that the 12-hour btc price has formed in recent days | Source: twitter.com/ali_charts/status/1783418598062465362/photo/1" target="_blank" rel="nofollow">@ali_charts on x
As can be seen from the chart, bitcoin's 12-hour price first saw a death cross with the 50-day SMA moving below the 100-day SMA. Then, it observed the completion of a TD Sequential setup, and the indicator suggested a bearish reversal.
Since this double bearish pattern appeared, btc has been declining, suggesting that these signals may already be in effect. “Yes btc falls below $63,300, prepare for possible drops to $61,000 or even $59,000,” says the analyst.
From the current price of the cryptocurrency, a possible reduction to the first of these targets would mean a drop of 4.6%, while a reduction to the last level would suggest a drop of almost 8%.
btc Price
bitcoin has so far managed to avoid dips below the $63,300 target indicated by the analyst as it is currently floating around $64,000.
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Looks like the price of the coin has lost its earlier recovery during the past 24 hours | Source: BTCUSD on TradingView
Featured image from Shutterstock, charts from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
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