Bitcoin Price Needs to Cross $62K to Mitigate Severe ‘Death Cross’ Effects

The price of Bitcoin is approaching a critical point where a “death cross” on the daily chart could occur. The resistance at $62,000 may be essential in preventing a significant decline in BTC’s value, which has historically followed similar patterns.

Key Resistance Level: $62,000

Recent trends indicate that BTC/USD is nearing a critical moving average crossover, known as a “death cross.” This scenario involves the 50-day simple moving average (SMA) slipping below the 200-day SMA. Current data shows that the 50-day SMA is at approximately $61,998 while the 200-day SMA is about $91,882, as sourced from TradingView.

The term “death cross” is used as a warning sign for potential downward movement following the crossover. However, past instances have produced mixed outcomes. For example, the last death cross in 2023 was followed by a Bitcoin rally instead of the expected price decline.

According to analysis, “In 2023, BTC managed to rise after the death cross. It surpassed the 50-day SMA and maintained it as support before continuing to climb,” a trader noted.

In contrast, previous years (2019, 2021, and 2022) have shown that initial gains during a death cross were often followed by declines.

“The overall trend will likely depend on whether BTC can exceed the 50-day SMA at $62K and retain it as support, as was seen in 2023,” the trader concluded.

If Bitcoin fails to hold above this level, further declines may be expected unless significant shifts occur in the broader economic landscape, particularly regarding the U.S. Federal Reserve’s interest rate policies. A change in rates could potentially benefit crypto and risky investment assets.

Sluggish Bitcoin Open Interest Amid Price Recovery

As Bitcoin’s price attempts to recover, reaching a high of $62,775 before slightly retreating, market analysts observe a lack of momentum in open interest in futures markets despite rising prices. This comes on the heels of an unprecedented market event for Bitcoin.

“The current Bitcoin surge seems largely driven by shorts covering their positions in the futures market,” a contributor from a cryptocurrency analytics platform remarked.

Others have highlighted the resistance beyond $62,000, with significant support identified at this week’s lowest levels below $50,000.

This content does not offer investment advice. Each financial move carries risks, and individuals are encouraged to perform their own due diligence before making decisions.