Cryptocurrency analyst Colin Talks Crypto has commented on the recent sharp decline in Bitcoin (BTC) and issued a controversial warning to the market.
Analysis of the "Death Cross"
According to the analyst, the "death cross" formation that occurred a few days ago, which has historically often signaled a market bottom and a strong subsequent recovery, did not have the same effect this time. This suggests that Bitcoin may have already passed its peak, potentially at $126,000.
Colin noted that this particular pattern has only occurred similarly once before in history: on January 14, 2022. This date marked the beginning of a major bear market that commenced immediately after the 2021 bull market. At that time, the death cross did not lead to new highs but instead heralded a prolonged downtrend. The analyst observed that Bitcoin's recent reaction to the death cross formation bears a strong resemblance to that earlier period.
Future Market Outlook
Colin Talks Crypto indicated that this similarity suggests the peak for the current cycle may have already been reached. However, he did not entirely dismiss the possibility of a medium-term rally. "I expect a temporary relief rally in the coming months, similar to what's seen in a strong bear market," he stated. "However, this is more likely to be a recovery within a bear trend, not a bull run that will yield a new all-time high."
Understanding the "Death Cross"
For those unfamiliar with the technical term, Colin explained that a "death cross" occurs when the 50-day moving average crosses below the 200-day moving average. While this technical indicator has frequently signaled a bottom and a subsequent rapid recovery after a sharp decline, this expected behavior has been disrupted in 2022.
This is not investment advice.