In a notable development, Bitcoin (BTC) has recorded its first-ever weekly “Golden Cross,” as the 50-week simple moving average (SMA) surpassed the 200-week SMA on the weekly price chart. The Golden Cross, a term derived from technical analysis, is seen as a positive signal suggesting a favorable shift in asset prices.
This bullish crossover, marking a long-term bull market anticipation, is considered by many market enthusiasts as a forward-looking indicator. The Golden Cross occurs when the short-duration SMA, in this case, the 50-week SMA, crosses above the long-duration SMA, which is the 200-week SMA.
While the Golden Cross is traditionally viewed as a positive indicator, some seasoned traders caution that crossovers can be lagging indicators, reflecting past data. The current Golden Cross on the weekly chart is a result of Bitcoin’s impressive rally of over 70% in the past four months, reaching $42,700. Critics argue that such crossovers may coincide with trend exhaustion.
It’s worth noting that previous instances of Bitcoin’s daily chart experiencing both Golden and Death Crosses have had a mixed record in predicting bullish and bearish trends. The weekly Death Cross confirmed in early 2023, for example, marked the bottom of the bear market.
Bitcoin’s recent rally has faced a hurdle, with the cryptocurrency trading 10% lower from its highs near $49,000 following the debut of 11 spot exchange-traded funds (ETFs) in the U.S. last Thursday. Observers attribute the slowdown in bullish momentum to ETF flows not meeting the initially high market expectations.
Greg Cipolaro, Global Head of Research at NYDIG, highlighted, “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.”
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