Bitcoin forms another ‘golden cross’, but this time round we’re not sure whether this is good news or bad news

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Last Updated on 18 January 2024 by CryptoTips.eu

For the first time this year we’re witnessing a Bitcoin ‘golden cross’ in the charts. Last time this occured was on 1 November and it was followed by a 30% increase of the Bitcoin porice; However, we’re not so sure this time round because of other factors. So, how should this golden cross be interpreted, good or bad omen?

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Death cross

There are two technical signals that anyone who reads a stock market chart should know. They are the ‘death cross’ and the ‘golden cross’. Both are lagging indicators. Whenever you see one of those two signs in a stock or a cryptocurrency chart, you can assume that experienced investors will either take their profits and sell (in the case of a death cross), or increase their purchases (in the case of a ‘golden cross’).

The golden cross normally forms when the 50-day average rises above the 200-day average on a chart. Investors see this as a very bullish signal because it means there are more buyers in the short term than in the long term.

Lagging

However, there is a caveat because just like most technical indicators, the golden and death cross are both ‘lagging’ meaning they tend to show up after the event has taken place.

And this time the ‘golden cross’ is not formed on a daily chart, but on a weekly one, so it is a little later. It is being formed because we shot up to $49,000 last week (on the first day of the Bitcoin ETF introduction on the American stock exchanges).

So how should we interpret this? Well, at this point it’s still a bit too early in my opinion. Ethereum clearly had a much better week than Bitcoin (which lost an average of 6% in the last 7 days) and Solana also seems ready to make a leap. Unless Bitcoin manages to close above $50k by Sunday, no new green candle will follow on that weekly chart and therefore we won’t get confirmation of the continuation of that golden cross.

However, this signal will certainly be noticed on Wall Street. And at a time when the American, European and Asian stock markets are not starting the year very well, any bright spot of news is welcomed.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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