Bitcoin's Death Cross Signal: $36,000 Target at Risk

Bitcoin is signaling a significant warning in the technical analysis community. The death cross pattern appearing on the three-day chart indicates that the cryptocurrency could experience a serious decline. According to analyses shared on TradingView, this death drop signal is a recurring pattern seen in historical bear cycles and often predicts price drops of over 50%.

At the time of reporting, Bitcoin is trading at $71,080. However, this level reflects weakened market strength due to being below two critical moving averages. Trading below the 50-day simple moving average (SMA) and the 200-day SMA indicates a technically bearish market environment.

The Crossover of Double Moving Averages: A Warning from Historical Bear Cycles

The death cross pattern occurs when the 50-period moving average (MA50) crosses below the 200-period moving average (MA200). This technical formation is common at the start of bear markets and is often considered a precursor to long-term downtrends.

Historical data shows that every time this signal has appeared, Bitcoin experienced sharp declines. During the 2022 market downturn and the 2018 crypto winter, the asset fell approximately 52% after this indicator appeared. An earlier reference from the 2014 cycle shows an even steeper decline of up to 57%. Given the current structure, it appears that MA50 has started to decline and has crossed below MA200, completing the bearish crossover.

Fibonacci Targets and Potential Accumulation Zones

If Bitcoin repeats similar movements seen in previous cycles, a significant decline is expected following the death cross signal. A roughly 52% drop from the crossover level could bring the price down to around $36,000. This level aligns with the 1.618 Fibonacci extension, marking the lows of the 2018 and 2022 markets.

Analysts consider the $40,000 to $36,000 range as a major accumulation zone. The $40,000 level is confirmed by the Fibonacci extension, while $36,000 represents the typical lower boundary after a death drop. These price targets are based purely on mathematical and historical pattern intersections.

Recently, Bitcoin surged to $74,000, reaching a one-month high. However, this rally was short-lived. Although short positions were squeezed, new inflows into spot Bitcoin ETFs, and rising geopolitical risks triggered the rally, momentum was quickly lost. Gains made during the week were erased by subsequent declines.

Mixed Signals from Technical Indicators

At current levels, Bitcoin’s technical indicators do not fully align with the death drop warning but serve as cautionary signals. The 14-day Relative Strength Index (RSI) stands at 45.93, remaining in neutral territory. Since RSI measures the speed of price movements on a scale of 0-100, this reading indicates neither strong buying nor strong selling.

However, the balanced picture from momentum indicators does not negate the warning signs from technical formations. Historically, when a death drop signal appears, even an RSI in neutral territory can precede a major decline. In such cases, the market may still seem resistant to the ongoing downtrend, but once a technical breakdown occurs, momentum can shift rapidly.

Bitcoin’s strong correlation with the US dollar also influences recent dynamics. Since late 2024, this unusual link has shown that as the dollar strengthens, it tends to suppress Bitcoin. This factor can amplify the effect of the death cross signal.