Compared to the golden cross, a death cross involves a downside MA crossover. This marks a definitive market downturn and typically occurs when the short-term MA trends down, crossing the long-term MA.
Simply put, it’s the exact opposite of the golden cross. A death cross is usually read as a bearish signal. The 50-day MA typically crosses below the 200-day MA, signaling a downtrend.
Three phases mark a death cross. The first occurs during an uptrend when the short-term MA is still above the long-term MA. The second phase is characterized by a reversal, during which the short-term MA crosses below the long-term MA. This is followed by the start of a downtrend as the short-term MA continues to move downward, staying below the long-term