Bitcoin Signals Bull Run after Formation of Golden Cross
A capital manager has taken to Twitter, stating that the Bitcoin golden cross has been formed. It will be the eighth time in the coin’s existence for it to form this cross.
The golden cross is a chart formation that cryptocurrency analysts use. What makes the golden cross special is that it is believed to mark the onset of a bullish rally. The golden cross is formed when the short-term moving average crosses above the long-term moving average.
Bitcoin Forms a Golden Cross
The capital manager has stated that the current golden cross has been formed by the 50-day moving average crossing above the 200-day moving average.
Below is the chart that the capital manager posted on Twitter:
#Bitcoin technical update: The Golden Cross is official. An upside breakout from the bearish pennant will also likely be confirmed at today’s close.
To news: Neutral
Opinion: Strong short-term price action. Recent bearish patterns breaking down. pic.twitter.com/VPnpz2tiHh
— Dr. Jeff Ross (@VailshireCap) September 15, 2021
The chart above shows that the 50-day moving average has made a move above the 200-day moving average. Because of this movement, the capital manager has stated that the primary cryptocurrency will experience a “strong short-term price action.” The movement also shows that the recent bearish trends were fading.
What the Trend Means for BTC Prices
Market analysts usually associate the golden cross with being a bullish signal for Bitcoin. While the cross has been correct at times and spearheaded a bull run, there are instances where the cross has been wrong, and instead of Bitcoin rallying, it has gone in a reverse trend.
While the golden cross signals bulls to come, the death cross gives bearish signals. The death cross is usually formed at the end of a bull market. Both crosses have been wrong in certain instances.
In May, Bitcoin made a strong bullish rally, reaching an all-time high of $65K. The formation of the death cross was wrong because instead of crashing, Bitcoin continued to register gains. The crash happened later when China introduced a mining ban and when Tesla’s CEO announced that the electric car manufacturing company stated that it would no longer accept Bitcoin.
Following the death cross creating a false signal, there is also a chance that the current golden cross will be wrong. It could be a fake chart formation that could wrongly predict a bull run, but instead, traders could experience bears in the coming weeks.
Furthermore, the golden cross could be referring to Bitcoin making a bull run for the short-term before bears kick in. However, the golden cross could also be accurate and lead to the coin hitting another peak beyond $63K.
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Author: Ali Raza