Information

What’s All This Hype Behind The Death Cross

news-image

Death Cross! This is one such topic that’s been discussed in a wide range today. But you might have come across questions like,

Advertisement

What is this death cross?  How does it happen?  How do you calculate it?  

Then you’re at the right place. This article will help you understand all about death cross in a much simpler way

What is Death Cross?

Death Cross is a technical measure indicating a more bearish trend to come. 

Analysts use the term death cross to check & analyze the future of an Asset so that they can take better decisions on their next trade 

Now let’s understand how to calculate this death cross and how it happens exactly.

death cross

Step 1: Open Trading View website

Step 2: In the search box, for example, search BTC/USDT, and a chart opens

Step 3: Now select the indicators option & search Moving Average (MA) and select MA twice

Step 4: Set the 1st MA as 50 days along with a colour & 2nd MA as 200 days with a different colour.

article

Now you can see that the asset’s average price over the last 50 day moving average falls below the 200-day moving average and the point where a cross or X shaped line forms, it’s called a death cross

FYI : Moving Average is a technical indicator used by analysts and investors to determine the average price of an asset

Opposite Of Death Cross? Golden Cross!!

In Golden Cross the Red Line indicating 50 days MA goes above Blue Line indicating 200 days MA

GoldenCross-5c6592b646e0fb0001a91e29

Golden Cross Occurs In Three Stages:

cp article images (1)

Stage 1: The 50-day moving average is below the 200-day moving average

Stage 2: You can see the trend reverses and the 50-day moving average crosses above the 200-day moving average. This is the phase where Golden Cross occurs

Stage 3: The start of the bullish moment – 50-day moving average stays above the 200-day moving average indicating a Bullish trend

Final Thoughts

So by now, you have understood the difference between the death cross and the golden cross, wherein the major difference lies in the death cross being downtrend and the latter being uptrend.

But there are a few tips one must look into before considering the death cross and golden cross

  1. It is always recommended to find a balance between both the trends, never rush.
  2. Both these crosses are not final, before investing consider other indicators as well
  3. Investors should also take stop-loss into consideration before making any investment decisions. As a long-term trader you should always maximize profit while minimizing your loss

No matter whether you decide to buy or sell, always research well before entering or exiting the market to have control over your profits or loss.

Show More

Disclaimer : The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of Coinpedia. Every investment and trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Related Articles

Back to top button
Close
Close