Ethereum’s Double Death Cross: What Does it Mean?
Ethereum, the largest altcoin by market cap, has recently experienced its second ever “death cross,” which is often seen as a bearish signal. However, this may not necessarily indicate a declining trend for ETHUSD. Let’s take a closer look at what to expect from this double death cross.
Key Points:
- A death cross typically suggests a downward trend and generates a sell signal in a moving average crossover trading system.
- With only one previous death cross before this recent crossover, it’s difficult to determine its influence on future results.
- Trend-following systems, like those utilizing moving averages, tend to be the most profitable for technical analysts and portfolio managers.
- By betting on the trend, the gains from lengthy stretches outweigh the occasional false signals and losses.
- Ethereum’s back and forth signals could simply be sideways chop, and a new trend may not have been established yet.
Can Ethereum Avoid Further Collapse?
Ethereum’s weekly Average Directional Index (ADX) is currently below 20, suggesting that the death cross may not be a strong signal. If Ether can golden cross once again before the ADX rises above 20, it may be able to narrowly avoid a further collapse.
Hot Take:
While the double death cross may be concerning for Ethereum, it’s important to consider the limited sample size and the potential influence of other trend-following tools. With the ADX below 20, there is still a chance for ETHUSD to bounce back and establish a new trend.
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