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.
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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.
