Bitcoin drops to $35,400, "death cross" is imminent, and whales are still buying coins at low prices

Bitcoin, the largest cryptocurrency by market value, has now erased all of its gains made in a week.

According to Bitpush terminal data, on Friday, Eastern Time, the price of Bitcoin fell below the support level of $36,000, reaching a low of $35,431.15, a drop of nearly $3,000 from the average price of the previous trading day. Although the price of Bitcoin has risen by about 23% since the beginning of the year, some traders are still worried about the imminent "death cross" model.

The appearance of a "death cross" in a price chart is generally a bearish signal and could signal trouble for Bitcoin amid regulatory crackdowns and environmental concerns. A death cross occurs when the 50-day moving average crosses below the 200-day moving average, which could happen over the weekend.

The death crosses in 2018 and 2019 led to further declines of 70% and 47% in Bitcoin prices, respectively. The 2020 death cross occurred shortly after the market crash caused by the coronavirus pandemic in March, which proved to be a lagging technical signal at the time.

Despite this, some analysts remain bullish on Bitcoin.

“When the stock market rally ends, we expect bitcoin and gold to be the primary beneficiaries,” Bloomberg Intelligence commodity strategist Mike McGlone wrote in a note Friday.

Fidelity’s head of global macro, Jurrien Timmer, also stuck with his bullish “double bottom” thesis.

Timmer noted that Bitcoin-correlated stocks are trending higher, which could be an upcoming move for Bitcoin: “Bitcoin still needs to trade/hold above $41K to confirm ‘failed 5th’ and double bottom thesis, but with Bitcoin-sensitive stocks trending higher, it suggests the bullish thesis still looks good. Correlated markets often give important signals at tops and bottoms.”

But Timmer also warned that if Bitcoin fails to stay above $41,000, this will give bears the upper hand and the price will plummet to $23,076.

Data from the on-chain analysis platform Santiment shows that although Bitcoin has fallen back to the level of June 12, whales holding at least 1,000 BTC continue to show a hoarding pattern, and medium-sized "whales" (holding 10-1,000 BTC) have not retreated, while addresses holding a smaller number of Bitcoins are declining rapidly, indicating that retail investors are panic selling.