Bitcoin’s First-Ever Weekly Golden Cross

Enthusiasts in the market are buzzing about the occurrence of a “golden cross” on Bitcoin’s (BTC) weekly price chart, a pattern often interpreted as a bullish signal. For the first time ever, Bitcoin’s 50-week simple moving average (SMA) has crossed above its 200-week SMA, confirming this notable event. Originating from Japan, according to some technical analysis literature, the golden cross and its opposite, the “death cross” (where the short-duration SMA falls below the long-duration SMA), are closely watched by traders.

The golden cross is typically viewed as a forward-looking indicator suggesting a potential long-term bull market. However, this optimistic view is not without its skeptics, mainly because these averages are derived from past data and tend to follow price trends. Essentially, they represent historical price action, and the emergence of Bitcoin’s first golden cross on the weekly chart is largely attributed to Bitcoin’s impressive 70% rally to $42,700 over the past four months.

Experienced traders often see these crossovers as lagging indicators that might coincide with the exhaustion of a trend. For example, the death cross observed in early 2023 was retrospectively seen as marking the bottom of the bear market. Bitcoin’s daily chart has shown that golden and death crosses have a mixed track record in accurately signaling bullish or bearish trends.

The arrival of a Golden Cross shortly after seeing a Death Cross does improve the odds of the Golden Cross’ survival, however. 

Bitcoin’s recent surge has lost some momentum, with the cryptocurrency currently trading 10% below the highs of nearly $49,000, which were seen following the launch of 11 spot exchange-traded funds (ETFs) in the U.S. last Thursday.

Market analysts suggest that the waning bullish momentum could be due to the initial flows into these ETFs not living up to the lofty expectations set by the market. Greg Cipolaro, the global head of research at NYDIG, pointed out in a recent newsletter that “The Net flow of funds for the ETFs has been $965M (including seed funds), a strong start thus far. However, the spot price is down from the launch-driven euphoria as investors set unreasonably high launch expectations.”