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Bitcoin ‘Golden Cross’ Appears in Price Charts, Confirming Bullish Trend

source-logo  coindesk.com 15 September 2021 14:01, UTC

Bitcoin has formed a “golden cross” on its daily price chart, a rare but closely-tracked pattern that generally occurs when an asset is on the upswing.

The golden cross is a momentum indicator, defined as the point at which the 50-day moving price average crosses above the 200-day moving average. It’s a sign that the short-term price trend is rising faster than the long-term trend.

The appearance of the golden cross marks a dramatic comeback for bitcoin since a “death cross” appeared in the price chart three months ago. At the time, bitcoin was descending from the all-time high near $65,000 reached in February. A few days after the death cross, the price fell to $28,600, close to its 2021 low. The death cross is when the 50-day moving average falls below the 200-day moving average.

The golden cross is generally regarded as a “positive” indicator,” the investment research firm Fundstrat wrote Wednesday in a note to subscribers.

It’s worth noting that the indicator’s predictive power for future trends is limited.

James Butterfill, investment strategist at CoinShares, warned in a LinkedIn post that traders should be “cautious” when pundits refer to the golden cross pattern as a bullish technical signal. The indicator “hasn’t been a consistent predictor of positive returns.”

That said, bitcoin was changing hands around $9,500 in May 2020, the last time a golden cross appeared. Over the remainder of the year, the price tripled, and then doubled again early this year before peaking.

It's hard to discern consistent trends in bitcoin’s price performance following the confirmation of a “golden cross” in price charts.. (CoinShares)

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