Bitcoin Printed A Death Cross For The First Time In Three Years – Why Analysts Think It Could Signal A Bottom, Not A Crash

• Bitcoin printed its first weekly “death cross” in three years, a pattern that has appeared near past market bottoms.
• BTC gained over 30% in August, but trading volumes remain weak and near 2023 levels.
• Bitcoin is holding support around $77,500 to $78,000, while a move back above $80,000 would improve the outlook.
• Analysts said $58,000 is still a downside risk, though rising volumes would strengthen the case for a new bull run.

Investors were left with a big question on Monday: Is Bitcoin (BTC) building a bottom for its next rise, or is it falling deeper into a bear market? Bitcoin was holding near $78,000, and although it has gained more than 30% in August, there is still a lot of uncertainty due to low trading volumes and a new weekly "death cross." Analysts are now watching key support and resistance levels to see what happens next.

A macro and on-chain analyst named Nonzee said Bitcoin had printed its first death cross in three years, adding that the pattern had shown up at the end of previous bottom-formation cycles and before some of Bitcoin's strongest bullish reversals. 

"This is not Bitcoin entering a new collapse," the analyst said. He framed it as Bitcoin slowly laying the groundwork for the next cycle. According to the analyst, a bottom "is not one candle" but a series of events that erodes confidence before the trend changes. “This signal appeared during the final phase of bottom formation and preceded some of Bitcoin’s strongest bullish reversals.”

When one moving average falls below another, it's called a death cross. Since both averages lag price, the signal shows the drop that came before it rather than what's happening now.

Bitcoin’s 30% August Rally Masks Weak Trading Volumes

CryptoQuant analyst Darkfost said the biggest change was the gap between Bitcoin's (BTC) August price move and how the market actually traded. "During the month of August, $BTC delivered a performance exceeding 30%, yet trading volumes across various exchanges continue to show a certain weakness, in line with the trend seen in July," Darkfost said. He added that while in August the volumes picked up from July, “these volumes are holding at levels not seen since September 2023, meaning 3 years, a notable gap between price performance and underlying market activity.” 

“This could signal that investor disinterest reached an extreme point this summer, especially as Bitcoin attempts to relaunch a positive momentum,” he said. Adding that if sales started to rise along with the price rise, that would be a strong sign for a new bullish cycle.

$58K Is Not Ruled Out

On-chain analyst James Check, who’s behind the Checkonchain newsletter, reported that Bitcoin was holding steady in the mid-$70,000s and had only dropped 5% from $81,400, which it reached briefly last week. The analyst stated that many investors bought less Bitcoin than expected due to fourth-quarter price drops. A drop below $58,000 is possible, but the analyst said it's not likely. He added that $95,000 was the last fight for the bulls and that a break below that level meant the start of a full bear market. Ever since, Bitcoin’s price has traded lower. 

On Stocktwits, retail sentiment around BTC rose to the ‘bullish’ from the ‘bearish’ zone over the past year. Chatter around it also improved to ‘high’ from ‘normal’ levels, as watchers for the token increased by over 489% in the past year.

The Macro Backdrop At Play

On Friday, the U.S. Treasury Department raised the number of sanctions it was putting on Iran. This is the kind of geopolitical escalation that has generally made risky assets less valuable. So far, Bitcoin has stayed in the same range. 

Egyptian bank Banque Misr was hit with penalties by the Treasury. They proposed a rule that would stop the bank's branches in the United Arab Emirates from dealing in dollars. It was said by Egypt's central bank that it was in touch with U.S. officials and that the move only affected dollar transactions between Banque Misr UAE and other banks. Treasury also put sanctions on a company based in Hong Kong and a person who is connected to Iran's Bank Melli.

Earlier this week, Treasury Secretary Scott Bessent laid out plans for what he called Iran's "economic asphyxiation." He warned that countries that don't join the effort would face consequences. Washington has not yet punished Iran's main trade partners, such as China and India. Iranian President Masoud Pezeshkian said that the measures were having an effect because exports and imports had dropped by 25% to 35% in the past few months. Inflation in Iran reached 66% per year last month.

What To Watch Next

Analyst James Check said that around $77,500 to $78,000 has been support. The comeback case would be stronger if the $80,000 that was lost when the price fell from the local high of $81,400 was brought back. On the other hand, he has set $58,000 as its "bear scenario," and Darkfost's theory of stabilization is based on the idea that exchange volumes will rise along with price.

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