Bitcoin and crypto markets are in recovery mode, with the asset rallying following an ominous technical signal this week.
BTC prices surged to an intraday high of $62,790 during the Friday morning Asian trading session.
The move added 9.5% to the value of the asset over the past 12 hours as it climbed from its intraday low of $57,000 late on Aug. 8.
Bitcoin has now recovered around 25% from its dump to $49,800 on Monday following a bout of dip buying and is on track for recovery back to its range-bound channel and accumulation zone.
Death Cross Averted
In a post on X on Aug.9, analyst and ITC Crypto founder Benjamin Cowen said that Bitcoin would rally into its death cross.
The forecast has now materialized, and the bearish technical signal is in the past … for now.
A death cross is a technical analysis indicator that shows a short-term moving average falling below a longer-term moving average, usually a 50-day and a 200-day. It is often a signal of a bearish trend reversal, but that is not always the case.
Cowen observed that in 2023, BTC started its rally just after the death cross. “It then got above its 50-day SMA (simple moving average) and subsequently held it as support before going higher,” he added.
However, in 2022, there was a small rally into the death cross, but it faded after the chart pattern occurred.
The analyst concluded that Bitcoin would have to hold above support at $62,000 for the move upwards to be sustained. However, the asset has since retraced below that level.
“The durability of this move will likely depend on first BTC getting above its 50D SMA ($62k), and then holding it as support like it did in 2023.”
Analysts responding to the tweet said, “The first death cross is not a big deal, it’s the second one we should be more nervous about.”
There were two death crosses during the 2021 bull market, a large rally followed the first but the two-year bear market followed the second.
Elsewhere on Crypto Markets
Total capitalization has gained 6% on the day, returning to $2.2 trillion at the time of writing. However, it needs to reclaim $2.5 trillion to wipe out all losses this week.
Bitcoin has been in the driving seat, but Ethereum is also showing strong signs of recovery. ETH added 9% on the day, topping $2,700 during Asian trading before cooling slightly to trade at $2,630 at the time of writing.
Altcoins are mostly in the green with double-digit gains for Near Protocol (NEAR), Pepe (PEPE), Stacks (STX), Bittensor (TAO), and a whopping 32% for Sui (SUI).