The “Death Cross” is a technical chart pattern that serves as a warning signal for investors about potential price declines. It occurs when the 50-day moving average falls below the 200-day moving average and both lines intersect. This pattern typically appears during turbulent market phases and indicates a longer-term downward trend.
Current Situation (April 2025)
- S&P 500: The Death Cross was confirmed in April 2025 – it last appeared here during the Corona crisis (March 2020) and in March 2022, followed by significant losses.
- Nasdaq 100 & Tesla: The formation appeared on April 14; historically, it has been followed by up to 25% price losses.
- Bitcoin: Despite the Death Cross in early April, the cryptocurrency subsequently rose by 7%, highlighting the limited predictive power of the pattern.
- Individual Stocks: Disney, Bank of America, and Delta Air Lines are facing the pattern, while Nvidia has already fallen by around ~12% since its appearance.
Expert Opinions
- BofA Securities: Paul Ciana emphasizes the relevance of the 200-day moving average – a decline could retest the current yearly low of the S&P 500.
- Piper Sandler: Craig Johnson views the Death Cross as a lagging indicator that often signals a recovery rally rather than further losses.
- Mixed Signals: While previous Death Crosses in the S&P 500 had ambiguous consequences (e.g., March 2020: subsequent rebound), analysts currently warn of trade conflicts as an additional risk factor.
Practical Implications for Retail Investors
| Aspect | Recommendation |
|---|---|
| Risk Management | Check stop-loss orders or hedge portfolios (e.g., via put options) |
| Opportunities | Analyze long-term entry points for heavily fallen stocks like Nvidia |
| Diversification | Consider commodities or defensive sectors as a counterbalance to tech stocks |
For Bitcoin, the recent example shows that fundamental factors (such as ETF approvals) can overshadow technical signals – here, a differentiated view is essential.
The current uncertainty emphasizes the need for a disciplined investment plan with clear exit rules – especially for volatile assets like cryptocurrencies or individual stocks with a high beta factor.