Technical reversal or false alarm? How does the dead cross formation's pattern affect Bitcoin's valuation

This week, the cryptocurrency market faces a critical testing moment. Analysis specialist Gamza Khanzadaev points out a dangerous setup on the weekly chart — a signal that could have significant consequences for investors. Bitcoin (BTC) is currently trading at $90.81K, but the lack of a required rebound above $90,000 to close the weekly candle risks confirming a bearish cross. This formation signals a potential correction path toward $67,000.

When Moving Averages Signal a Change in Direction

The (50-week and 200-week moving averages) act as market navigators for long-term participants. When the shorter crosses below the longer, the market typically interprets this as a shift in momentum. Such a pattern on Bitcoin’s technical chart is not a daily occurrence — it’s a rare moment that influences decisions of both traditional funds and individual investors.

History shows Bitcoin has repeatedly gone through such formations. In 2022, similar warnings preceded a significant decline, while in other periods they proved false signals. The current situation, however, is characterized by high leverage in the derivatives market, which can accelerate moves upon breaking key levels.

Critical Zones: From Resistance to Deep Supports

Market participants are closely watching these levels:

• $90,000 — the current ceiling, crucial for negating the bearish scenario
• $86,000 — the first line of defense, a break here on high volume opens the way for further declines
• $80,000 — a psychologically significant support zone with historical importance
• $74,111 — a level identified through Fibonacci retracements and past price patterns
• $67,000 — the ultimate target of the bearish scenario

Each of these levels represents a zone where intense buying and selling pressure previously concentrated. Analysts monitor volume profiles at these thresholds to assess their current resilience to being broken.

Will Volume Confirm or Contradict This Pattern?

Key observation: this week, there is a lack of strong buying pressure necessary to support upward moves. The main concern is the absence of buyer interest. Moving averages alone are lagging indicators — they confirm trends that are already underway rather than predict them. When combined with low volume, this signal gains much greater significance.

Price history shows that breakouts without volume support often do not hold. This is the difference between a potential move and a real change in market narrative.

The Macro-Economic Context of 2025

Digital asset valuations in 2025 are susceptible to many factors: regulatory clarifications in major economic centers, the pace of institutional adoption, and interest rate dynamics. Bitcoin acts as a barometer for the entire altcoin sector. Its technical formations matter not only for speculators but for the entire ecosystem’s investment decisions.

Practical Implications for Market Participants

The pattern set by the current configuration suggests several scenarios:

Bearish scenario: Break below and sustained trading under $86,000 with increasing selling volume leads to testing subsequent supports down to the $67,000 zone.

Bullish scenario: Rebound and close above $90,000 by the weekly candle’s end invalidates the entire bearish setup and shifts the short-term narrative.

Consolidation scenario: Bitcoin remains between $86,000 and $90,000, awaiting an external macro or microstructural market impulse.

Can Such Warnings Be Ignored?

Answer: no, but they must be interpreted correctly. Technical analysis is only a map, not a recipe for the future. Investors should combine such signals with their own risk tolerance, investment horizon, and fundamental project assessments. Setting stop-loss orders, rebalancing portfolios, or adjusting position sizes are practical tools guided by such analyses.

On-chain data, momentum oscillators, and market sentiment indicators provide additional perspectives beyond moving averages. Together, they create a more complete picture than relying on a single signal.

Frequently Asked Questions

Q1: What exactly does “dead cross” on the Bitcoin chart mean?

A dead cross occurs when the 50-week moving average crosses below the 200-week moving average. Traders interpret this as a potential shift from an upward to a downward trend. It signals a possible path for further moves but is not a guarantee.

Q2: Why is $86,000 so significant?

It is the first support level beyond the current resistance zone. Breaking it on high volume opens the path to deeper supports. It serves as the first line of defense against more aggressive selling.

Q3: Has Bitcoin experienced a dead cross before?

Yes. History shows varied outcomes — some led to prolonged bear markets, others resulted in short corrections or false signals.

Q4: What would need to happen for this bearish scenario not to materialize?

Bitcoin maintaining above $90,000 to close the weekly candle. That would confirm the bearish cross has not yet been established and could change the short-term dynamics.

Q5: How can this analysis be practically used?

Not as the sole basis for decisions, but as part of a broader strategy. It can help set stop-loss levels, determine position sizes, or timing rebalancing. Always combine with other indicators and your own risk plan.