Bitcoin Enters Death Cross Phase, Investors See Buying Opportunity

On April 6, 2025, Bitcoin entered a death cross phase, where the 50-day moving average fell below the 200-day moving average. This technical indicator has historically been associated with market downturns and bearish trends, causing uncertainty among investors about whether this signals a major downturn or a buying opportunity.

The term "death cross" refers to a technical pattern that occurs when the 50-day short-term average crosses below the 200-day benchmark. Since its inception, Bitcoin has experienced eleven death crosses, each resulting in varying market outcomes. During major bear markets in 2014-2015, 2018, and 2022, Bitcoin saw significant price drops of 55% to 68%, with bear markets lasting between 9 and 13 months. However, in other instances, death crosses did not result in dramatic price drops, with Bitcoin prices showing modest falls or even no change. These events often marked new price bases that initiated upward trends.

Historical data shows that death crosses typically signal the start of price drops, but Bitcoin has shown resilience against these trends. According to James Butterfill, the Head of Research at CoinShares, Bitcoin's average price falls by -3.2% one month after a death cross, but the long-term trajectory shows positive trends. The price of Bitcoin often increases following death crosses within three-month periods. This indicator does not guarantee a prolonged downtrend but rather a temporary pause in market recovery. Investors often view the death cross pattern as a buying opportunity, which may explain why the current death cross is receiving less concern than usual.

Some market participants do not consider the death cross formation significant. Crypto analyst Mister Crypto viewed the ongoing death cross formation as an event that would trigger a BTC price rally instead of a market decline. He predicted that the upcoming rally of 2025 would become the most despised movement of the year, posting a chart displaying prior incorrect signals in the cycle.

The Bitcoin death cross serves as a market warning but does not predict extended bear markets. Historical data indicates brief market pullbacks that can lead to upward price movements in the subsequent months after the pattern emerges. Bitcoin's strong fundamentals, rising institutional investments, and limited coin supply support the likelihood that this signal will become obsolete. The current market situation presents an opportunity for investors to acquire Bitcoin at reduced prices ahead of its future market gains. However, investors must exercise caution and follow price fluctuations and risk control techniques to make sound decisions.