February 2, 2023
A golden cross occurs when the 50-day simple moving average (SMA) of the security’s price moves above its 200-day SMA, producing a cross on the price chart. Bitcoin has seen eight golden crosses to date, of which three, confirmed in February 2012, October 2015 and May 2020, were on point.
- It is predicted that Bitcoin will likely see its first golden cross since September 2021 in the next week or two, according to charting platform TradingView. Meanwhile, the S&P 500’s averages appear on track to produce the golden cross on Thursday.
- Traders should however note that although bitcoin’s big rallies often start with a golden cross, not all golden crosses lead to a big rally.
- The golden cross appears unreliable as a standalone bullish indicator and should be read in conjunction with other factors.
Our stance at 1.2 labs however, is that it is a slow or late indicator. This method is not the best for reliability. Moving averages are backward-looking indicators and as a result this signal tells us only that the market’s short-term gains have surpassed its long-term gains. However, chart analysts and traders see it as a sign of higher prices over the long run.
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