What is the death cross?
A death cross occurs when a shorter moving average crosses below a longer moving average. For example, when the 50-day moving average falls below the 200-day moving average. This indicates that the short-term trend is much weaker than the long-term trend, and therefore the market can be considered bearish.
Once the crossover occurs—this applies to both the golden cross and the death cross—we need to confirm the new trend. One of the methods suggested by technical analysis is trading volume. Every trend reversal is supported by an increase in buying or selling volume.
A death cross occurs when a shorter moving average crosses below a longer moving average. For example, when the 50-day moving average falls below the 200-day moving average. This indicates that the short-term trend is much weaker than the long-term trend, and therefore the market can be considered bearish.
Once the crossover occurs—this applies to both the golden cross and the death cross—we need to confirm the new trend. One of the methods suggested by technical analysis is trading volume. Every trend reversal is supported by an increase in buying or selling volume.