Crypto analyst Benjamin Cowen recently discussed the impact of the death cross indicator, which has appeared again on Bitcoin’s chart. Thanks to this indicator, the $62,000 price level has become crucial to Bitcoin avoiding another price crash.
Bitcoin had rallied to as high as $62,000 after recovering from its price crash below $50,000 on August 5. The rise to $62,000 brought about the Death Cross, which now threatens lower prices for the flagship crypto. The death cross indicator is usually considered bearish and suggests that a prolonged period of declining prices may be on the horizon for the asset in question.
The crypto analyst specifically drew comparisons to the Death Cross, which occurred in 2019, to provide insights into what Bitcoin’s next move might be. He noted that the Death Cross in 2019 marked a local top for the flagship crypto, as it went on to record lower highs after then, and its price was bearish for about four months afterward.
Cowen revealed that whatever happens next for Bitcoin will mainly depend on external factors rather than the prevailing conditions in the crypto market. This includes macroeconomic factors like inflation and the labor market. Indeed, the macro side is believed to be responsible for the crypto crash on August 5 as fears about a recession heightened.
The US Federal Reserve has so far held off on cutting interest rates in a bid to bring inflation down to its desired 2%. However, their hesitation has led to projections that the US economy could soon enter a recession. The July US job reports also showed that market participants have cause to be worried as the unemployment rate was higher than expected.
Cowen noted that September is, on average, the worst month for Bitcoin, suggesting that the flagship crypto could suffer a downtrend that could extend into September. The timing of this Death Cross could also provide insight into what might happen next for Bitcoin.
Bitcoin is facing a potential price decline as the Death Cross looms. The $62,000 price level is crucial for Bitcoin to avoid further price drops, and external factors such as macroeconomic conditions will play a significant role in determining Bitcoin’s future trajectory. Investors in the crypto market should pay close attention to these indicators and trends to make informed decisions about their investments.
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