A cryptocurrency analyst has pointed out how Bitcoin has recently formed a technical crossover that preceded bearish shifts in the past.<\/p>\n
In a new post<\/a> on X, analyst Ali Martinez has shared a daily price chart for Bitcoin showcasing a crossover between two simple moving averages (SMAs)<\/a> that the asset has gone through recently.<\/p>\n An SMA is a statistical tool that averages a quantity over a given period of time and that, as its name suggests, updates in time with the quantity. This tool can be useful for studying long-term trends, as it smooths out the graph by eliminating short-term fluctuations.<\/p>\n SMAs can be taken over any window, but in the context of the current topic, two specific periods are of relevance: 21-day and 50-day. Below is the chart posted by Martinez that shows the trend in these SMAs for Bitcoin over the past decade.<\/p>\n From the graph, it\u2019s visible that the daily Bitcoin price has seen its 21-day SMA fall below the 50-day one recently. In the past, this crossover has tended to act as a \u201cdeath cross<\/a>\u201d for the cryptocurrency, with its price plunging after the signal\u2019s appearance.<\/p>\n In the chart, the analyst has highlighted the previous instances of this death cross. It would appear that the asset experienced drawdowns ranging between 54% and 69% following the crossover.<\/p>\n The most recent occurrence of the crossover was in 2022, leading into a price decline of almost 66% to the bear market bottom. Given the past pattern, it only remains to be seen whether the 21-day SMA going below the 50-day SMA will prove to be bearish for Bitcoin this time.<\/p>\n In the scenario that bearish momentum does follow for the asset, it could be at risk of breaching below an on-chain level known as the Realized Price-to-Liveliness Ratio. This level represents the ratio between two on-chain indicators: the Realized Price<\/a> and Liveliness.<\/p>\n The first of these tracks the cost basis of the average investor or address on the Bitcoin blockchain, while the latter encapsulates the spending\/HODLing behavior of long-term investors.<\/p>\n