Golden Cross: Food for the Bitcoin bulls?

While the Bitcoin exchange rate never gets tired of struggling with the US$8,000 mark, the community never gets tired of wondering: Is the past rise sustainable? Or are we just dealing with a well-designed bull trap? The Golden Cross can provide answers.

One forward. With all the effort we make: We (still) haven’t found the crystal ball. Whether the Bitcoin course shoots finally through the moon or we only feed the bears by falling into the bull trap: With one hundred percent certainty we can say only tomorrow, how high the Bitcoin course will be. Nevertheless, there are some indicators, both fundamental and technical, that give us a glimpse of the future. Today: the Golden Cross.

Bitcoin is in a bull market again as you can read at as well.

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What’s the Golden Cross?

The Golden Cross is an indicator from traditional trading that can be applied to Bitcoin trading and thus also to Bitcoin price forecasts. We are dealing with a figure that is the counterpart to Death Cross. (More about this in detail here).

Two important signals cross at the Golden Cross: the short-term moving average MA50 and the long-term MA200 from below. The latter is again the average price of the last 50 or 200 days. (More information here).

Now, the Golden Cross forms a bullish buy-signal. The crossing of the two mean values indicates an upward movement. Because altogether more importance is attached to the MA200 due to its longevity. If now the one mean crosses the other, this is understood as a reversal of the trend: The bears let the bulls in.

As you can see from the chart above, the Bitcoin price has currently reached the Golden Cross. However, as you can see from the above chart, the end of 2015 has already happened. However, before it went up in the long run, the price fell after crossing the Golden Cross for a certain period of time. Only then did the bulls make a longer-term rendezvous.

Another important indicator for a bull rally: Trading volume rose steadily over the last month. If these indicators are adhered to, this suggests that the Bitcoin price will soon rebound.

The Golden Cross and the Bitcoin Price: How Safe is the Indicator?

As is often the case with trading and chart analysis, we also look back at the past with the Golden Cross in order to make forecasts for the future. What we can see: In the past, the Golden Cross proved to be a good indicator of a longer-term price increase. In the reverse retrospective, too, it can be seen: The Death Cross as bearish counterpart to the Golden Cross initiated a negative Bitcoin price trend in March 2019.

In order to afford further guidance, it is also worth taking a look at the larger picture here. As we can see with some certainty: Dealing with crypto currencies is becoming increasingly attractive for institutional investors. This suggests the assumption that they are also oriented towards indicators such as the golden cross, as this is an adaptation of a traditional indicator to a new type of investment and trading vehicle.

Nevertheless, the crypto sector remains unpredictable. Sudden price drops as well as steep rises can at best be assumed. That’s how long we stay in search of the crystal ball.

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