A death cross is a downward crossing of a shorter-period moving average beneath a longer-period moving average. It is commonly interpreted as bearish because recent average prices have weakened relative to a longer history. The familiar daily-chart example uses the 50-day average crossing below the 200-day average.
A relationship between averages
The event concerns the two average lines, not simply the asset’s price falling below one line. A shorter average that was already below the longer average has not formed a new death cross merely by staying there.
Analysts can choose other periods or use simple versus exponential moving averages. Those choices affect when a crossing appears. The timeframe must also be stated: 50 hourly candles are not 50 days. An unfinished candle can change the current average values before its close.
Why the name overstates certainty
The calculation summarizes past prices. By the time a death cross appears, much of a decline may already have occurred, and the current price may even be recovering.
Sideways markets can produce alternating death and golden crosses without a durable trend. A death cross therefore does not establish an inevitable crash, measure fundamental value, or guarantee that opening a short position will be profitable.