Investors are excited about the ‘golden cross’ that formed on the Bitcoin chart last Sunday (29). Basically, the golden cross is formed when the 50-day moving average crosses the 200-day moving average. In other words, it is an indicator that the market has become more optimistic.
The standard is one of the best-known metrics, even used by giants like Fidelity, a manager that manages $4.5 trillion and is trying to launch a spot Bitcoin ETF in the US.
Perhaps even more important than the golden cross, it is worth remembering that Bitcoin had formed a ‘death cross’ in early September, causing investors to worry. In other words, Bitcoin not only maintained its price at a delicate moment but also reversed market sentiment.
The History of Bitcoin’s Golden Cross
This is the second golden cross formed on the Bitcoin chart in 2023. As recently as February, when Bitcoin was trading at $22,700, the pattern saw Bitcoin jump to $31,800, up 40% in a five-month rally.
Before that, in September 2021, Bitcoin appreciated by 50% in just two months and reached its historical top after the formation of the same pattern.
In any case, the golden cross showed even bigger gains between May 2020 and April 2021. After the 50-day moving average crossed the 200-day moving average, Bitcoin rose 613%, from US$9,100 to US$64,900.
Another use of moving averages is for resistance and support. As you can see from the chart, these averages, both 50 and 200 days, often help keep Bitcoin’s price steady, both up and down.
The Fed Meeting Week Could Give Bitcoin a Boost
The golden cross comes at an opportune time for Bitcoin investors. Next Wednesday (1st), the US Central Bank will decide whether to make changes to US interest rates, or leave them as they are, currently between 5.25 and 5.5%.
According to data from the CME FedWatch Tool, the market is confident that the Fed will not change its monetary policy. However, there is still a small chance that the US Central Bank will cut interest rates, which would be great for Bitcoin and other assets.
In other words, if Bitcoin were to manage to double in price by 2023 despite the Fed’s tight monetary policy, analysts believe the asset could boom once the Fed starts cutting interest rates, causing the U.S. economy becomes freer to invest.
Finally, there are several stories for Bitcoin to rise. According to experts, even fear caused by geopolitical conflicts can cause Bitcoin to rise. Regardless, ETFs are still the market’s main hope that the bull run continues.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
