Bitcoin is once again showing a long-term warning sign, “death cross”, that has preceded major price drops in the past. While the market is still moving sideways and short-term price action looks stable, a key signal on the weekly chart suggests that traders should stay cautious. At the same time, recent price strength shows that buyers have not disappeared.
What the Death Cross Means
According to AliCharts, Bitcoin has printed a “death cross” on the weekly chart. This happens when the 10-week average price falls below the 50-week average price. This signal does not predict exact timing, but it has often appeared before large market corrections in the past.
This latest death cross formed around December 8, roughly three weeks ago, while BTC was already consolidating and many traders were getting liquidated due to impatience.
How Bitcoin Reacted in Past Cycles
History shows that this weekly signal has not been kind to Bitcoin prices. Each time it appeared in previous cycles, a deep correction followed.
- September 2014: Bitcoin dropped about 67%
- June 2018: Price fell roughly 54%
- March 2020: Bitcoin declined by around 53%
- January 2022: A sharp fall of about 64% followed
If history repeats or even partially rhymes, a similar 50%–60% pullback could happen again. On November 16th, a similar bearish crossover appeared on lower timeframes while BTC was trading near its October highs due to government shutdown on November 12. The closest comparison is the 2019 shutdown, when Bitcoin fell more than 9% five days after the government reopened on January 25, 2019. At that time, the signal was followed by a steady sell-off rather than an immediate crash. Bitcoin went on to slide roughly 25% from its peak near $126,000, eventually falling into the mid-$90,000 range as traders slowly reduced risk and momentum faded.
Today’s setup looks different in one key way. Bitcoin is already well off its highs and appears to be stabilizing near the $88,000 level. Short-term price action has turned positive, with BTC slowly rising. Still, analysts warn that the weekly death cross carries more weight than shorter-term signals. As AliCharts noted, “Whenever Bitcoin has printed a death cross between the 10-week and 50-week averages in the past, it has been followed by a meaningful correction. This is about preparation, not prediction.”
If BTC fails to hold current levels near $88,000, history suggests the market could drift lower over time, potentially testing deeper levels between $50,000 and $38,000. On the other hand, if buyers continue defending current prices and Bitcoin reclaims resistance near $89,500, the market could delay or soften the impact of the bearish signal.
Bitcoin Price Action
Despite the long-term warning, short-term price action has been relatively strong. BTC price rose 1.61% in the past 24 hours and is trading near $88,924. The broader crypto market also moved higher, gaining around 1.36%. This shows that buyers are still active and that the market is not in a state of panic yet. One key factor supporting prices was the recent Bitcoin options expiry. Around $1.87 billion worth of BTC options expired on January 2.
Most of these positions were bets on higher prices. BTC managed to stay above the $88,000 level, which reduced sudden selling pressure. As a result, the market absorbed this event smoothly without a sharp drop. At the same time, about $480 million worth of BTC left exchanges in the last 24 hours. Data shows that around 10,700 BTC moved into long-term holding wallets over the past month. Reduced sell-side liquidity and renewed accumulation have created favorable supply dynamics. ETF flows have also stabilized after mid-December outflows. On the technical side, the MACD crossover suggests weakening bearish pressure, with RSI14 (49.52) leaving oversold territory. A close above $89,500 could trigger algorithmic buying.
Final Thoughts
Bitcoin is still down about 30% from its October all-time high near $126,000, and the current correction has lasted around four weeks so far. In past cycles, similar pullbacks sometimes went deeper and lasted longer.
For now, the market is sending mixed signals. Short-term data points look supportive, while the weekly death cross warns that further downside remains possible.
Also Read: Arthur Hayes: Liquidity Bottomed, Bull Run Begins Now
Source: https://www.cryptonewsz.com/bitcoin-death-cross-returns-on-weekly-chart/
