What It Means
For example, when the 5-day moving average crosses from above to below the 25-day moving average, this event is called a dead cross. It shows that short-term momentum has fallen below the medium-to-long-term average, and it is sometimes referenced as one possible sign of a shift toward a downtrend.
How to Read It, and What to Watch Out For
A dead cross is nothing more than a snapshot of the relative positions of moving averages calculated from past prices — its appearance does not guarantee that the price will fall afterward. A "false signal," where the price moves in the opposite direction right after the cross, can also occur, so it is common to check it alongside trading volume and other indicators.