Crypto analyst Benjamin Cowen recently discussed the impact of the death cross indicator, which has reappeared on Bitcoin’s chart. Thanks to this indicator the price point of $62,000 has become crucial for Bitcoin to avoid another price crash.
Cowen noted in a video posted on his YouTube channel that Bitcoin is at risk of falling lower if it fails to stay above $62,000 on its way to the Death Cross. Bitcoin had risen as high as $62,000 after recovering from the price crash below $50,000 on August 5. rise to $62,000 brought the Death crosswhich now threatens lower prices for the flagship crypto.
The Cross of Death and its impact on the price of Bitcoin
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As such, Bitcoin must regain and hold the $62,000 price level quickly enough or risk further price declines, with a drop below $62,000. psychological level of $60,000 already in sight. The crypto analyst specifically drew comparisons to the Death Cross, which took place in 2019, to provide insight into what Bitcoin’s next step could be.
He noted that the Death Cross marked a local top for the flagship crypto in 2019 as it hit lower highs afterward and the price was bearish for about four months after that. However, Cowen admitted that things could turn out differently this time, noting that these types of indicators tend to develop in a “slightly different way” during different cycle phases.
The timing of this Death Cross could also provide insight into what could happen next for Bitcoin. Cowen noted that September is the average month worst month for Bitcoinindicating that the flagship crypto could see a downtrend that could extend into September.
It comes down to the macro side
Cowen revealed that what happens next for Bitcoin will depend mainly on external factors and not on the prevailing conditions in the crypto market. This includes macroeconomic factors such as inflation and the labor market. The macro side is believed to be responsible for the crypto crash on August 5, when fears of a recession increased.
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The US Federal Reserve has held up so far lowering interest rates in an attempt to reduce inflation to the desired 2%. However, their hesitation has led to predictions that the US economy could soon enter a recession.
The July US Jobs Reports also showed that market participants should be concerned as the unemployment rate was higher than expected. The macro side has a significant impact on Bitcoin and the crypto market, as it largely determines how much money investors are willing to invest in these risky assets.
Featured image from iStock, chart from Tradingview.com