Bitcoin has seen a significant decline today, falling to nearly $80,000, marking a concerning seven-month low. This downturn has officially pushed Bitcoin into a “death cross,” a technical indicator resulting when the asset’s short-term average price dips below its long-term average. Such patterns typically indicate a prolonged bear market, signaling traders that the bullish phase has come to an end—at least for the present.
The broader cryptocurrency market is experiencing turmoil alongside Bitcoin, shrinking to a total market capitalization of $2.91 trillion after losing almost $60 billion in just 24 hours. Almost every coin within the top 100 by market capitalization is facing a downward trajectory. The Fear and Greed Index, a tool that gauges market sentiment on a scale from 0 to 100, has plummeted to 14, indicating “extreme fear” among traders. This figure is only four points above the year’s lowest sentiment level of 10, recorded in February.
Contributing to the bearish sentiment is the macroeconomic outlook. Recent shifts in expectations surrounding the Federal Reserve’s interest rate policy have taken a toll. Just weeks ago, markets saw a 97% likelihood of a rate cut in December, but those odds have since dwindled to between 22% and 43%. Fed officials have expressed a preference for holding rates steady through the end of the year, a move detrimental to risk assets like cryptocurrencies, which thrive on low interest rates.
A prediction market has indicated overwhelming pessimism regarding Bitcoin’s ability to reach new all-time highs this year, with traders estimating a 90% likelihood that it won’t surpass its peak of $126,000 from early October. Further, the bearish outlook prevails with a 40% chance noted for a decline as low as $69,000.
Technically, Bitcoin opened at $86,691 today but quickly tumbled to an intraday low of $80,620 before recovering slightly, settling around $85,187—reflecting a 1.61% drop for the day and almost 5% in the last 24 hours. As the death cross solidifies, it compounds bearish pressure on the asset.
The Exponential Moving Averages (EMAs) reveal a significant shift in market momentum, as the 50-day EMA has decisively crossed below the 200-day EMA. This suggests that bearish control has taken root, as the price of Bitcoin now trades below both EMAs. Attempts to bounce back encounter immediate resistance, potentially widening the gap between these two averages, thus reinforcing the bearish trend.
Additional indicators provide alarming signals. The Average Directional Index (ADX) is at 41, indicating a strong downtrend. Meanwhile, the Relative Strength Index (RSI) has dipped to 23.18, placing Bitcoin deep in oversold territory. Although this suggests potential undervaluation, it does not imply that the selling pressure will cease soon.
Looking ahead, Bitcoin faces critical support levels. Immediate concerns hover around $80,697, with potential declines to $74,555, and $65,727 should it break that threshold. In a worst-case scenario, prices could plunge as far as $53,059 if panic ensues, as these levels coincide with prior trading consolidation zones.
Ethereum is also facing challenges, opening at $2,830.7 before slipping to $2,621. Although its situation is not as dramatic as Bitcoin’s, the technical indicators are alarming. Ethereum is on the brink of forming a death cross, with its price trading below both 50-day and 200-day EMAs. Currently testing the 0.618 Fibonacci retracement level at roughly $2,755, if this fails, the next significant support appears at $2,180—a potential 22% decrease.
XRP, despite its relative strength compared to its counterparts, is still feeling the effects of a confirmed death cross, with the price trading under both its EMAs and a bearish trend indicated by an ADX of 32. The next major support level for XRP sits at $1.589, which would represent a 20% drop from current levels, followed by a catastrophic potential slide to $0.66, nearly an 80% decline from its all-time high.
As the crypto market continues to navigate this turbulent landscape, traders are left to contemplate how low these prices may go and where the next areas of support might lie.
