The price of bitcoin plunged Thursday below $ 7,000. For some, it is a "Cross of Death", ie a statistical confirmation of longer-term trends. Clearly, it will continue to come down in the coming months (read This Japanese banker bet on a return of Bitcoin to a prehistoric period: 100 dollars!)
The price of Bitcoin stagnated in March due to a large number of investors waiting. The enthusiastic statements of Twitter's big boss, Jack Dorsey, will have changed nothing about this gloom. For him bitcoin will be the only global currency in 10 years. Still, the Coincheck scandal in Japan and new criticisms from the SEC have weighed more heavily on investor sentiment.
The principle of the Cross of Death is that if the moving average of a short-term asset falls below its long-term moving average, this indicates that its value will depreciate over time. In other words, the market is running out of steam and a correction is underway. Even simpler: the price of Bitcoin has been declining for nearly 50 days and some analysts believe that the decline itself will lead to further declines. In short, John McAfee can legitimately start shaking.
Compare currencies and bitcoin?
Critics of this theory of the death cross rightly note that the application of a statistical model usually used for movements of stocks and foreign currencies carries risks, since bitcoin is not historically part of this category of assets. So the application of traditional prediction models on Bitcoin is legitimately subject to debate.
Bitcoin weekly course on Coinbase. Yesterday the value plunged below $ 7,000.
Bitcoin was trading yesterday 6,886.21 dollars, which according to CNBC has marked a weekly decline in value of nearly 29%, and 50% for the year. Note that the price of Bitcoin has a proven influence on other virtual currencies.