The Long-Awaited Drop Happened in the End. What is the Upcoming Bitcoin Death Cross and Why Is It Important?

Bitcoin price is currently finding support at 7,400 against the US dollar ($7,440 at the time of writing) with a market cap of $135B.

A major drop that was long-awaited and we wrote about on Monday, happened yesterday when the price of the top cryptocurrency fell $1,000 from $8,300 of 22nd October to a low of $7,300 in only 24 hours.

What caused the drop and what to expect now?

Facebook Libra might have caused the start of the bull run back in May and the popular social network congressional hearing of yesterday might have caused the drop according to many.

Things are not looking good for a Libra launch, made difficult by government regulations and skepticism in the space. This might have brought a negative sentiment across the whole cryptocurrency market.

The threat of Google Quantum Computer is also bringing clouds to the security of Bitcoin and cryptocurrencies in general. Although we will write in the next few days how a threat is not imminent and rather doubtful for bitcoin, inaccurate news might be more harmful when spread across misinformed masses.

When the market shows signs of weakness as it’s currently occurring in crypto, even the slightly adverse news can have a massive impact overall.

In the last few weeks, bitcoin was consolidating in the $8,000 range with not much volume and a dead cross looming and reflecting already a bear signal.

A death cross is typically a technical chart pattern indicating the potential for a major selloff. It appears on a chart when an asset short-term moving average crosses below its long-term moving average. Typically, the most common moving averages used in this pattern are the 50-day and 200-day moving averages (Investopedia definition)

The death cross is yet to form but on the verge of happening after quite long, since March 2018.

Therefore the event is expected to bring some consequences and they do not appear to be optimistic in the short term with experts still expecting the cryptocurrency to drop further to even the $6,000 range before the next run-up to new all-time highs in the aftermath of the halving.

With current consolidation at $7,400, everyone’s wondering if the bottom has been reached.

The next support levels to watch are $7,200 and $6,800. In order to become bullish again, we need to see bitcoin hit and break $7,800 soon.

The whole market followed suit yesterday and suffered major losses all around.

Ether (ETH) dropped to $157. 

BCH lost almost 13% falling from $233 to $203.

LTC recorded a loss of over 10% from $55 to $48.

Same fate for EOS that fell from $2.94 to $2.62.