What does the BTC death cross mean?

According to a research report by blockchain platform Xangle, BTC experienced a death cross at 8:00 a.m. Beijing time on April 6. Generally speaking, when a death cross occurs, users should pay attention to the increase in market volatility.

Death cross refers to the falling short-term moving average crossing the falling long-term moving average from top to bottom. At this time, the support line is broken downward, indicating that the stock price will continue to fall and the market is bearish. In the case of death cross, a long-term moving average falls below a shorter-term moving average, which is a technically negative signal.

In fact, in the moving average chart where daily lines and short, medium and long-term lines are arranged at the same time, in addition to the clear bullish arrangement (bull market) and bearish arrangement (bear market), there are more cases where several lines are entangled up and down. However, special attention should be paid to the reversal signals shown by the moving average, the most famous of which are the golden cross and death cross.

Whether it is a golden cross or a death cross, it is a buy or sell entry and exit signal. In the analysis of individual stock trends, you can grasp the timing of entry and exit, and in the analysis of index trends, you can judge the bull and bear situation.

The death cross is usually considered a bear market transition, whereas the golden cross means a bull market transition. Previously, after the golden cross occurred in the BTC market in 2018 and 2019 (until the death cross occurred), the returns of BTC were +3% and +108%, respectively. After the death cross occurred, the returns of BTC were -39% and -40%, respectively, and the market completely entered a bear market.

However, it should be noted that the BTC market has not fluctuated in the "usual situation" recently, so investors need to pay more attention. The on-chain transaction volume is also on a downward trend. The 24-hour on-chain transaction volume of BTC the day before yesterday was 522,577 BTC, which is the fifth lowest data this year. In addition, when the golden cross occurred in the BTC market at the beginning of the year, the yield of BTC did not rise, but plummeted by 31.1%, which completely violated the bullish expectations of investors.