What is Death Cross?

Death Cross is a term used in technical analysis and usually describes a condition on the price chart of stocks or other financial assets. A Death Cross refers to a situation where an asset's short-term moving average line (for example, the 50-day moving average) crosses the long-term moving average line (for example, the 200-day moving average) downwards.

This is generally considered a technical signal thought to indicate selling pressure and the beginning of a negative trend. Investors and technical analysts may interpret the occurrence of a Death Cross as a sell signal, thinking that the asset is likely to lose value in the future.

The term Death Cross comes from the idea that when the lines of moving averages cross each other downwards, it represents a dramatic and negative price movement. This can often indicate weakness and downtrend of an asset, but it should be noted that, like any technical analysis indicator, this signal can be misleading and should be evaluated together with other factors.
Investors should be careful when using technical analysis indicators and should consider such signals alone, combined with fundamental analysis and other information.

The opposite of the Death Cross, that is, the situation where the short-term moving average line crosses the long-term moving average line upwards, is called "Golden Cross". The Golden Cross is generally considered a positive signal, indicating that the asset is trending towards gaining value.

Such indicators used in technical analysis can help investors better understand price movements and predict future price movements. However, technical analysis should not be used alone. A more comprehensive assessment should be made by combining fundamental analysis with market conditions, news and other factors.

Investors should use caution when using technical analysis signals and indicators and should always consider them in conjunction with market conditions and general economic trends. Market conditions can change over time and decisions based on a single indicator can be risky. Therefore, it is important to provide a broad perspective and analysis before making an investment decision.