Last week'southward drib in Bitcoin (BTC) that saw the toll of Bitcoin falling from $47,358 to $43,178 has sparked fears of an extended selloff.

Independent market analyst Nunya Bizniz highlighted a surly fractal on Bitcoin's weekly charts concerning its 21-week exponential moving average (EMA).

In item, the cryptocurrency has closed below the said support zone 18 times to appointment but but retained its previous bullish bias four times out of all—as shown past the dotted vertical lines in the nautical chart below.

BTC/USD daily cost chart featuring its 21-calendar week EMA. Source: Nunya Bizniz, TradingView.com

In the remaining cases, a shut below the 21-week EMA led Bitcoin prices extremely lower, barring a imitation bearish breakout in August 2022 that soon resulted in a "tremendous balderdash run," as the analyst noted.

Similarly, Bitcoin's recent suspension beneath the wave in May 2022 besides crashed prices below $thirty,000 for the first time since Jan 2022. However, the crossover did not effect in a full-fledged bearish breakdown; traders bought the dip well-nigh $xxx,000 and led the prices back above $50,000.

But overall, the phenomenon of Bitcoin prices breaking beneath 21-week EMA caused an extended selloff almost 78% of the time.

Bitcoin slips below 21-calendar week EMA, again

Bitcoin closed the week ending on Sept. 26 at $43,178, alerting almost its 19th historical refuse beneath the 21-week EMA—which was around $43,502 at the weekly close.

While the fractals envisioned a downside issue, a close look at the relationship between the 21-week EMA and 50-week simple moving average (SMA)—as shown in the chart below—noted that a potential bearish outlook would need farther validation.

That is primarily because of traders' immediate reaction to the two moving averages, particularly when the 20-week EMA (the greenish wave) closes below the 50-calendar week SMA (the blue moving ridge). The so-called Death Cross indicator has previously coincided with farther declines in the Bitcoin market.

Bitcoin price weekly chart featuring 20-50-MA decease cross. Source: TradingView.com

For instance, the BTC/USD exchange charge per unit slipped below its 21-week EMA (~$8,041) in the calendar week ending on Jan. 29, 2022, only retained its upside bias until the green wave closed below the blueish i. Subsequently, the pair bottomed out near its 200-week SMA (near $3,187).

Similarly, the twenty–l MA death cross in March 2022 came only a week ahead of the infamous COVID-19 selloff, led by the COVID-19 led global market crash. Again, Bitcoin ended upwardly closing nigh its 200-week SMA (~$5,512), simply to bounce back toward new tape highs in afterwards sessions.

Related: JPMorgan CEO says Bitcoin toll could rise 10x but still won't buy it

Therefore, it appears that Bitcoin's potential death cross betwixt its 20-week EMA and l-week SMA could trigger the adjacent selloff crisis with the ultimate downside target sitting virtually the 200-week SMA (around $sixteen,000).

At the aforementioned time, the Fibonacci retracement levels near $34,712 and $27,580 could proceed the Bitcoin prices from getting toward the 200-calendar week SMA.

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