Bitcoin (BTC) just added another huge factor to the bullish case, as a golden cross of the 50-day and 200-day moving average appears on the daily chart.
Bitcoin 50-Day MA Crossed Over, Sparking Expectations of Big Rally
Bitcoin prices managed to bounce quickly from a dip close to the $9,500 level. A recovery to $9,800 also meant the price charted a bullish indicator, a golden cross of the 50-day and 200-day moving average.
This longer-term indicator has happened only a handful of times in the history of BTC, and has preceded significant rallies.
Ladies and gentlemen.. let me present the golden cross!
The last time this happened was April 24th 2019 at $5,400.
Before that was October 28th 2015 at $300. pic.twitter.com/BcBbry8FwO
— Crypto₿ull (@CryptoBull) February 18, 2020
A golden cross also preceded the rally of bitcoin from April 2019 onward. However, the price climb did not arrive immediately. For now, bitcoin prices settled once again above the $9,700 support level.
In the past few days, as BTC corrected from the $10,000 tier, predictions on future price moves diverged. There is an overall expectation for a rally ahead of the halving, but also short-term views to a significant slide.
Golden Cross No Guarantee of Immediate Price Action
The golden cross and death cross, however, are not working as an error-proof predictive tool. Analysts note that BTC behavior often does not follow through with the bullish or bearish scenario.
1/3 #bitcoin golden cross / death cross analysis
Since 2014 there were 10 golden/death crosses (50MA crossing 200MA)
In 3 of 5 death crosses cases #btc price didnt dump after the event.In 2 of 4 golden crosses cases #btc price didnt pump after the event. pic.twitter.com/CoRuzarm8u
— Shitcoin Riddler (@shitcoinriddler) February 18, 2020
Unlike traditional assets, BTC has multiple factors that can cause illogical moves and volatility. Intraday volatility is also highly unpredictable, with dramatic price moves within minutes.
For BTC, a few indicators are putting up a clash of bearish and bullish narratives. A golden cross and the halving expected in 84 days look like a certain recipe for a rally, a new yearly high and even an all-time high. However, the bearish case looks at trading waves and suggests the current level may see a more significant dip.
A neutral sentiment based on the Bitcoin fear and greed index led to mixed predictions, where a rally is not out of the question, but a short-term dip is also a possibility.
#BTC …. BTC will touch 9k than continue upside movement…and also golden cross coming..so still in bullish on BTC..Not panic selling 9k is buying opportunity#BTC #ETC #EOS #ETH #LTC #BTC #cryptocurrencies #crypto #bitcoin #Altcoins #Binance #LTC #EOS #trading #blockchains pic.twitter.com/sDZIaksIkG
— Kvcrypto (@Kvcrypto1) February 17, 2020
This time, the golden cross is viewed as an even more significant event, as daily averages start to look favorable for the first time since the 2019 rally. The rally caused 175% gains, though it failed to take BTC to its previous highs.
BTC trades, however, may happen on a smaller time scale, especially given the heightened activity on BitMex. The cross of moving averages may be an indicator outside the scope of intraday trading. However, the overall chart behavior is still viewed as potentially signaling not only a BTC rally but similar performance for altcoins.
What do you think about the BTC golden cross? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter @Kvcrypto1 @shitcoinriddler @CryptoBull