Bitcoin Nears ‘Death Cross’ Following 20% BTC Price Correction

Bitcoin (BTC) is on the verge of printing a new death cross on its daily chart following its 20% correction from the record high of over $126,270.

The technical pattern, at first glance, seems ominous. But if history is any guide, the signal may once again prove to be a lagging indicator rather than a warning of deeper losses ahead.

Bitcoin’s Death Cross Could Be a Bear Trap

A death cross occurs when Bitcoin’s 50-period moving average (MA) dips below its 200-day MA, often interpreted as a sign that bearish momentum is taking over.

However, past data show that this crossover has frequently arrived after most of the downside has already played out, and sometimes, right before a new uptrend begins.

For instance, BTC formed death crosses in mid-2023 and mid-2025, both of which were followed by impressive rallies of 213% and 75%, respectively. In both cases, the pattern coincided with the market bottoming out rather than starting a new down leg.

The 2022 death cross was the only instance in recent history that correctly signaled a prolonged bear phase. Bitcoin’s 50-day average crossed below the 200-day in February 2022, triggering a modest 13.5% bounce before the price collapsed nearly 64% to $15,500 by midyear.

That crossover came as the Federal Reserve began its most aggressive rate-hike cycle in decades, draining liquidity from risk assets.

By contrast, later crosses appeared when those macro headwinds were easing, allowing liquidity to return and risk appetite to recover.

Macro Tailwinds Strengthen Bitcoin’s Bullish Case

The macro backdrop adds weight to the argument that Bitcoin’s upcoming death cross could be a false alarm.

On Oct. 29, the Federal Reserve announced it would end its balance-sheet reduction (QT) program by Dec. 1, halting the roll-off of Treasurys and reinvesting mortgage-backed securities into government bonds, a move effectively designed to stabilize liquidity.

The same day, the Fed cut interest rates by 25 basis points to the 3.75%–4.00% range, marking the beginning of a long-anticipated easing cycle.

This dual shift, ending QT and lowering rates, means the Fed is no longer draining liquidity from markets, a dynamic widely viewed as supportive for risk assets like Bitcoin.

Some analysts anticipate Bitcoin to rally toward $150,000 by year’s end.