Bitcoin Death Cross, Should You Be Worried? [Crypto news 2022]
Should you be worried? Well, its probably not what you think and in todays video i want to break down a little bit the situation around the death cross, as well as talk about some of the inflation data that were seeing as well as what all these negative real rates, because thats Whats actually happening right now, what negative real rates actually mean historically for markets and what we might be able to infer from that moving forward my names lark, every everyday. I make videos talking about cryptocurrency investing. So if thats, a topic that you appreciate learning about, maybe to stay up to date with then a quick thumbs up be super. Super awesome only takes a quick second out of your day. Helps me out massively. So if you appreciate this kind of content, a quick tap on that would be awesome by the way, if youd like to earn a safe and simple passive income on your crypto currencies, you got yourself an account over on celsius, its crazy easy all. You have to do start, your account deposit, your bitcoin deposit, your ethereum, whatever other cryptos you might want to put on there. Ive got my matic on there, for example, and you just sit back and start earning money. Every single week you get paid out guild notification on your phone. You just made some money. It feels good 6.2 percent of your bitcoin 5.35 on your ethereum. Great rates on a load of altcoins and stable coins use the link down below to start your account, and you will get a 50 bit bitcoin bonus now lets go ahead and get into the topic here so lets just get it out of the way the death Cross scary sounds scary anyway, the old death cross people, you know, tend to fear the death cross, but does it really matter well a little bit investigation for you in bitcoins long history, weve only had eight death crosses now in case youre not familiar.
The death cross is usually looked at with simple moving averages. The 50 day in the 200 day you can see here. The dark blue line is the 200 day simple moving average. The light blue line is the 50 day moving average. So when the 50 day, the light blue line crosses under the 200 day, the dark blue line, that is, a death cross, the opposite here is the golden cross. When we have the short term crossing over the long term on the upside here, we of course have it crossing over on the down side. In total, weve had eight death crosses in bitcoins history. Now four of those death crosses were indeed deadly. They came before massive brutal sell offs. Now you have to understand. The death cross is a lagging indicator, a lagging indicator, so it shows that the market is already cooked and has been cooked for some time. So when we got these death crosses that resulted in further selloffs, the market was already down 50 percent. By that point, however, after the death cross happened, we had a 30 sell off a 60 a 61 and a 65 sell off so yeah 60 sell offs. Were the norm for three of the eight death crosses when they happened, which obviously super super brutal, not fun at all, for the market? Now, the on the other hand, we have half of our death crosses, which actually ended up, basically marking the bottom of a correction or a sell off.
Now they either came maybe a couple of days before or a couple of days after the bottom, but approximately they hit the bottom. They were the bottom signal actually and they were very short lived. Death crosses in terms of the the total time the 50 day spends under the 200 day moving average. So here we are again facing another death cross flip a coin man. Is it going to be bearish? Is this the bottom? Is it going to be bullish? History doesnt give us a lot of indication: 50, 50 right down the middle right down the middle versus either it being the bottom or it being the start of a vicious vicious sell off. We shall see, of course, what ends up happening. I, of course, remain generally bullish on the cryptocurrency markets for 2022. I think that this is just another. This is basically a repeat like situation of mid 2021 time, of course, will tell if that opinion is correct or not, but that is where i believe we are at the moment. This is likely marking a bottom, not the beginning of the end, but you know you can make your own decisions on where you think thats going to go. Also. This is an interesting one here to back up the bottom, not the end scenario, so you can see these areas here highlighted by these black circles. This is the bitcoin entity, adjusted dormancy flow, so you can see every time we have had this indicator move into the green box here, as is of course indicated by all these little black circles has been a bottom point for bitcoin.
You can see here boom bottomed out, 2012. boom bottomed out, 2015. boom bottomed out, 2018. boom bottomed out, covered crash boom bottomed out 2021, and here we are again back inside that green box. Now could it go lower into that box were just at the tippity tip of it right now? Yes, of course it could. I guess, if we get the death cross being a 60 sell off well go down here, but more than likely. In my opinion, this is again marking the bottom for us and well actually see a bounce here and potentially we could range sideways for weeks or even months, but that sell off that weve seen recently just under 40 000. That could have been the bottom for a while fingers crossed anyway. That being said, we are still in a downtrend for bitcoin this orange line here very simple thats. Our downtrend line we got ta beat it. This is the support area where we bounced out of almost to the dollar, hitting the level of support we found back in september nice little rally coming on here. As i was saying the other day, we could have a relief rally up into this area right here. Previous support now going to act as price resistance for bitcoin as we come out to meet it also, of course running into that downtrend line right here, very interesting area of confluence. That would be, i think, an area um to watch for a breakout if we do get a breakout beyond this.
That could signal a reversal, a big trend reversal here, breaking us out of this downtrend, getting us ready for the new uptrend, but that is also a very big potential area for rejection, so watch for that to confirm before, of course, making any moves unless youre playing The long from down here and then that might be an interesting area to book in some profits. Will you wait to see what happens on the next end? That being said, people have been buying bitcoin, not just me apparently, but also other people buying buying bitcoins. So bitcoin exchange outflows have seen the biggest daily spike since the big sell off back in september right. So we had the big self back in september. Fear levels were high. All the charts were screaming, you know, mark the things are overly oversold right, well same situation. Here we had 30 000 bitcoin leaving exchanges on january 10th thats the day when we got just under 40 000. Earlier this week there you go every single time, its the same gosh, darn story, bitcoin in moments of great fear, is transferred from the impatient to the patient, the long term believers and the short term speculators its how it always works. Here we go short term. Speculators have sold, i mean who the heck was selling their bitcoin for ‘ 000, whatever thats crazy man thats crazy, but somebody was doing it. Thank you, of course, for your uh for your sacrifice.
We all appreciate that now, of course, 30 000 bitcoin left exchanges going into cold wallets in the hands of hodlers classic classic. Now, all of this, of course, in the backdrop of this macro environment, thats happening right now, us inflation rose to nearly a four decade. High of seven percent in december now, what is interesting is that the projection was 7.1, so this was actually less severe than the market had been anticipating, which was a good thing. We were talking about this the other day. If it comes in less than expected, thatll be a positive thing for the market in the short term. If it comes in over, though it would have been a negative for the market in the short term, the market like this. This is a little bit under what they were thinking. It was going to be so there you go there. You go interesting too again. Just you know all these um people out there buying bitcoin as an inflation hedge who think that higher rates of inflation are inherently bearish for bitcoin very odd. But i guess they just worry too much about the macro environment and that the global markets are gon na. Go down the feds gon na pop the bubble and all that fun stuff, fed man freaking fed now here is an interesting one for you as well uh dan tapiero. He shared some great insights here. I want to share two of them with you hes saying impossibly attractive, minus six point: eight percent real use real yields in the usa.
So right now the interest rates are 0.25 percent in the usa, inflation is 7. So if you have dollars sitting in your bank account the real yield on those dollars minus six point: eight percent compare that to you, bring it over to crypto land, getting a rate of seven eight, nine, ten, twelve percent, very, very common in crypto, as he says Here legacy cash cannot be made attractive. No fed hikes can remedy the difference and hes absolutely right, like whats the best the feds going to do this year, theyre going to rate hike interest rates up to 1, the real yield will still be minus 6. In that situation, assuming uh the inflation stays at seven percent because theyre only going to hike it up by 0.25 percent at a time they said we are gon na do rate hikes. Maybe we get back up to one percent interest rates, thats abysmally, low, stable coins, on the other hand, going off the charts, as dan says, a deluge of institutional cash is coming im surprised more of it. Hasnt shown up yet, to be honest, i know, were at a quarter trillion dollars in total value locked in d5, but theres hundreds of trillions of dollars out there floating around in the markets, ready to come in chase that yield buy up that bitcoin its going to Happen also, this was a very, very interesting one, and this is what im going to leave you with today, because i found this to be fascinating.
Dan said that real interest rates are to remain negative for at least the next four to five years. So remember: inflations high interest rates are super low, so the real interest rate on your cash is in the negative if youre holding us dollars and looks pretty similar situation across the board globally for euros australian dollars, whatever your local fiat currency may be, of course, the Us dollar is the reserve uh currency of the globe, so its most important thats. What we talk about at all time, he says in previous such periods. Asset returns have been historic, historic asset returns during times of real interest rates remaining in the negative. He is predicting. The next four to five years for interest rates to remain negative, think about that think about that we could just be in the midpoint of the bull run of bull runs for the equity markets and for the crypto markets. As he says, cash stays worthless. Digital assets, bitcoin will outperform. What he also says is very very true. Is that theres no current buying panic, nor is there any euphoria like in 1999 when the dot com bubble, happed happened. Of course that was uh. You can see here now, of course, were in this situation. Again, interest rates are negative. The real interest rates are negative history. If it proves to be correct and look, history does not repeat but gosh, it sure does often rhyme we could be in for a period of historic returns in the markets seems like a good time to own bitcoin to me, but hey.
What do i know im just dude talking about cryptocurrencies on the internet, your question for today, what do you think is going to happen with this whole death cross situation? Was that the bottom, or is this the beginning of the end? Let me know down below in the comment section thanks so much for watching todays, video and peace out till next time.