Compared to the golden cross, the death cross includes a bearish moving cross. This represents a definitive drop in the market and usually occurs when the trends of the short-term moving averages fall, surpassing the longer-term moving averages. & nbsp;
Simply put, it is the exact opposite of the golden cross. A death cross is usually read as a bearish signal. The 50 day moving average usually crosses below the 200 day moving average, indicating a downtrend.
Three stages refer to the death cross. The first occurs during an uptrend when the short-term moving average is still above the long-term moving average. The second stage is characterized by a reversal, where the short-term moving average crosses below the long-term moving average. This is followed by the start of a downtrend as the short-term moving average continues to move lower, and remains below the longer-term moving average. & nbsp;
Like golden crosses, no two dead crosses are alike, but there are specific indications that they may occur. over here &[رسقوو]; Look at each stage of the Death Cross in detail. The first stage of a death cross is usually marked by the presence of an asset in an uptrend. This is followed by a weak 50-day moving average, which is the first sign that a downtrend may be on the horizon. When prices begin to fall after their peak, the short-term moving average deviates from the long-term moving average.
The second phase sees the 50-day moving average cross below the 200-day moving average. This is a key point, as it indicates that the asset may enter a downtrend. The divergence between the two moving averages becomes more pronounced as prices continue to decline. The death cross begins to form more clearly during this stage.
The final stage is marked by the 50-day moving average, which continues to the downside, remaining below the 200-day moving average. This indicates that the downtrend is already underway. A death cross usually leads to more selling pressure as traders liquidate their positions in anticipation of further price dips.
However, if the downtrend does not continue, it could mean short-term momentum and a quick price recovery, in which case, a death cross is a false signal.