Market enthusiasts call it a “golden cross,” signaling a positive shift in asset prices, and now that sign has finally appeared on the weekly Bitcoin (BTC) price chart.
Bitcoin’s 50-week simple moving average (SMA) has crossed the 200-week SMA for the first time ever, confirming a golden crossover. The phrase and its counterpart the “death cross,” in which the short-term simple moving average (SMA) drops below the long-term simple moving average (SMA), originated in Japan, according to some technical analysis books.
Many traders view crossovers as forward-looking indicators, with the gold version indicating a long-term bull market in the future.
Bullish interpretation can be challenging because averages are based on past data and tend to lag prices. In other words, the averages represent what happened in the past, and the first golden cross on the weekly chart is the result of Bitcoin rising more than 70% to $42,700 in four months.
Thus, experienced traders consider crossovers to be lagging indicators, often coinciding with trend exhaustion. For example, the weekly death cross confirmed in early 2023 was the bottom of a bear market. Bitcoin gold and gold crossovers daily chart has a mixed record of predicting bullish and bearish trends.
Bitcoin’s rally has already stalled, with the cryptocurrency trading down 10% from highs near $49,000 recorded after 11 spot exchange-traded funds (ETFs) began trading in the US last Thursday.
According to observers, the bullish momentum was dampened by the failure of early ETF inflows to meet high market expectations.
“Net fund inflow into ETFs was $965 million (including seed funds), a strong start so far. However, the spot price fell on euphoria,” Greg Cipollaro, global head of research at NYDIG, said in a news release on Tuesday. Launch-driven where investors have set unreasonably high launch expectations.”