Understanding Bitcoin's Current Landscape: Death Cross or $96K Recovery?

As Bitcoin continues to navigate a turbulent market, traders are eyeing potential recovery points following a significant sell-off. Here’s what to look out for this week.

Key Takeaways

Bitcoin traders are hopeful for a bounce-back above $100,000 after a recent decline.
A recent "death cross" on the daily charts is affecting BTC price momentum.
New data indicates speculators are acquiring coins from long-term holders.
Thanksgiving week is packed with key economic data that could influence market direction.
Cryptocurrency market sentiment is improving as traditional stocks show signs of distress.

Death cross vs. $96K rebound: 5 things to know in Bitcoin this week

Is Bitcoin Emerging from Recent Low Points?

After dropping to a local low of $80,500 last week, Bitcoin's future remains uncertain as we approach the end of November. Current market analysis from Cointelegraph Markets Pro and TradingView identifies the $88,000 level as a crucial resistance point.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

Traders are divided regarding the future of Bitcoin, with bearish predictions colliding with some cautious optimism. One trader, BitBull, noted in an X post that Bitcoin has successfully reclaimed its 20-period simple moving average (SMA) on the four-hour chart for the first time in two weeks.

BTC/USD four-hour chart with 20SMA. Source: Cointelegraph/TradingView

Another analyst, Daan Crypto Trades, expressed hope, stating that the weekly structure remains solid despite a recent support collapse, although he warned that Bitcoin has lost its Bull Market Support Band.

Crypto analyst Michaël van de Poppe indicated that recent candle patterns suggest a potential bottoming, with predictions of BTC trading within the $90,000 to $96,000 range in the near future.

BTC/USD three-day chart. Source: Michaël van de Poppe/X

The Challenge of the Death Cross

The imminent period will be a vital test for Bitcoin’s market resilience, following a "death cross" formed on November 15. This happens when the 50-day simple moving average (SMA) crosses below the 200-day SMA, which is typically a bearish sign.

The implications of this are contingent on Bitcoin's position in its price cycle; however, significant recovery is essential to avert a protracted downward trend. Commentator Benjamin Cowen observed that previous death crosses often marked local lows in the market.

BTC/USD one-day chart with 50, 200SMA. Source: Cointelegraph/TradingView

Cowen pointed out that if Bitcoin does not exhibit a bounce soon, the 200-day SMA (currently at $110,130) could become the target for a lower high, jeopardizing any hopes for a bull market revival.

Trader Rekt Capital highlighted that the 50-week exponential moving average (EMA), which recently caused market turmoil, is now aligning with a long-term downtrend, reinforcing its potential as resistance.

BTC/USD one-month chart. Source: Rekt Capital/X

Shift in Investor Dynamics

Bitcoin’s price fluctuations have caused significant shifts among investors. Recent analysis from CryptoQuant indicates that supply is transitioning from long-term holders (LTHs) to short-term holders (STHs).

According to CryptoOnChain, LTHs are increasingly distributing their assets, while STHs are actively buying and accumulating Bitcoin. This analysis showed a massive shift, with 63,000 BTC transferring from long-term to short-term investors.

Bitcoin LTH/STH 30-day net position change (screenshot). Source: CryptoQuant

Market participants have exhibited panic in response to recent market downturns, as indicated by a significant drop in their spent output profit ratio (SOPR), which reached its lowest level in 15 months.

Bitcoin STH-SOPR. Source: CryptoQuant

Economic Data and Market Impacts

While Thanksgiving week might be shorter for traders, they will be inundated with influential economic data sets. Key figures, such as the Producer Price Index (PPI) and the Personal Consumption Expenditures (PCE) Index, are slated for release, along with the Q3 GDP and initial jobless claims.

These economic metrics can significantly sway market sentiment, leading to changes in trader outlooks as Thanksgiving approaches.

Fed target rate probabilities for December FOMC meeting (screenshot). Source: CME Group

Recent updates suggest diminished expectations for further interest rate cuts from the Federal Reserve. According to CME Group’s FedWatch Tool, the likelihood of a 0.25% cut at the December meeting stands at around 70%, with Fed officials expressing caution in their recent communications.

Trading resource Mosaic Asset Company pointed out that US stocks appear oversold, hinting at the possibility of a rally as year-end approaches, driven by favorable seasonal trends.

S &P 500 one-day chart with RSI data. Source: Cointelegraph/TradingView

Signs of Recovery in Crypto Sentiment

The cryptocurrency market is showing early signs of recovery, contrasting with the bleak sentiment observed in traditional financial markets.

Fear & Greed Index data (screenshot). Source: Feergreedmeter

The Fear & Greed Index for cryptocurrencies has nearly doubled after reaching a recent low, indicating a jump from “extreme fear” to 19/100. While still teetering in the fear spectrum, this is a notable improvement compared to stocks, which are experiencing their low at 11/100.

Research firm Santiment reported that market sentiment for Bitcoin has fallen to its lowest levels since December 11, 2023, emphasizing the urgency of a sentiment turnaround.

Bitcoin sentiment data. Source: Santiment/X

Kobeissi noted that this drop in sentiment lacks a clear macro or news-driven catalyst, suggesting that the downturn is largely structural and influenced by leverage and liquidations.

“Leverage is amplifying shifts in investor sentiment,” the company stated in an X thread.

As Bitcoin and the broader crypto market move forward, traders should stay vigilant and informed as they navigate this unpredictable landscape.