Bitcoin (BTC) has recently exhibited a highly positive technical indicator known as the “golden cross” on its weekly price chart. The golden cross refers to the moment when a short-term moving average of an asset’s price surpasses a long-term moving average. Traders and investors often interpret this pattern as a signal of an upcoming bull market following a prolonged period of bearish trading. In this instance, Bitcoin’s 50-week moving average (WMA) has crossed above its 200-week moving average, marking a significant milestone in its history.
This occurrence is particularly noteworthy considering that Bitcoin experienced a “death cross” earlier in 2023, when its 50-week moving average dipped below its 200-week moving average. This event coincided with one of the cryptocurrency’s worst-performing years in 2022, during which its value plummeted by over 75% from its all-time high. Several prominent crypto companies, including Terra, Celsius, BlockFi, and FTX, underwent significant losses and liquidations. By mid-June 2022, Bitcoin’s price had fallen below its 200WMA for the first time ever.
In contrast, the golden cross follows a year of substantial recovery and renewed optimism for BTC. Investors flock to this digital asset due to wavering confidence in the traditional banking system and escalating geopolitical tensions. Additionally, the anticipation of a Bitcoin spot exchange-traded fund (ETF) launching in the United States has rekindled hopes of increased institutional involvement. Leading asset management firms such as BlackRock and Valkyrie anticipate ETF approvals to be granted imminently.
