Within days, bitcoin’s trading chart will print a golden cross. It may have already happened by the time you read this article.
What’s a golden cross?
A golden cross happens when bitcoin’s 50-day moving average goes above its 200-day moving average on a price chart. This last happened on May 20, 2020, and it looked like this:
Traders say this cross will send bitcoin’s price to the moon, but are they right?
Sometimes yes, sometimes no
Bitcoin has seen seven golden crosses in its history. Four times, its price went down afterward. Three times, its price went up afterward.
See for yourself:
We will absolutely see another golden cross within days. Some people will get hyped and excited about it.
I won’t. History suggests less than 50/50 chance the price will go up in the coming weeks.
Golden crosses don’t matter
Or, the golden cross could end up a big nothing-burger.
Like death crosses, golden crosses have no predictive value. For more on that, read my death cross article from June 2021.
Bitcoin’s Death Cross is Fast Approaching. Here’s What to Expect
There are reasons to get excited, but a golden cross isn’t one of them.
Get excited because the market now has more strength and less selling pressure than it has had all year. I’ve covered this for months in my newsletter, Crypto is Easy.
For example, bitcoin’s trading chart showed a beautiful bottoming formation this summer—down to $30,000 on May 19, then $28,500 on June 22, then $29,500 on July 20. Like so:
No big pump, no double top, no exit liquidity to dump on you, just three months of consolidation and churn to drive sellers out of the market.
Meanwhile, HODLers continue to grow even as the price goes up, something we only see at the end of bear markets and during bull market consolidations before the next leg up.
Other metrics and trading patterns also show strength, in drastic contrast to what we saw in the first few months of the year (even as price boomed).
I feel like we went straight from November 2017 to November 2018 in like 2 months
— Mark Helfman (@mkhelfman) June 26, 2021
Golden crosses confirm the price went very fast over the short term compared to the long term.
Let’s not get ahead of ourselves with moon shots and supercycles based on one equivocal signal. Bitcoin’s best days are ahead of us, but not because two lines crossed on a computer screen.
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio.
Originally published on Cryptowriter.