With the closing of yesterday’s daily candle, the golden cross was formed.
Macroeconomic data and US elections may boost bitcoin these days
One of the most anticipated bullish technical patterns by bitcoin (BTC) investors has finally formed. It is a golden cross.
This phenomenon occurs when bitcoin’s 50-day moving average (MA) price crosses above its 200-day MA. Such a movement, which occurs when the price is rising, shows that short-term demand is increasing over long-term demand.
In other words, this formation, which can be observed through technical analysis of the price chart, indicates that the buy level is strengthening. That is why many consider the golden cross as confirmation of an uptrend.
Typically, this formation has preceded significant rises in the price of bitcoin. It is for this reason that, as CriptoNoticias anticipated at the beginning of the week, various operators expected this feat to happen again, something that finally happened yesterday.
With bitcoin price rising yesterday to over $70,000 (USD), the 50-day MA surpassed the 200-day MA. In this way, a golden cross was formed, a milestone that had not occurred for a year, as can be seen in the following graph.
This shows a change in the outlook for bitcoin, as the 200-day MA had remained above the 50-day MA for almost three months. Around then, a death cross occurred. This is the opposite of gold, that is, an exceeding of the long-term moving average above the short-term one, something that showed less demand.
With the realization of the golden cross, hopes grow that the price of bitcoin will continue in a bullish period. This could easily take it to new high prices, given that the coin is now trading near $72,000. This price is only 2% below its historical record registered seven months ago, which was USD 73,700.
The previous golden cross that occurred was at the end of October 2023, when the currency was trading at USD 28,000. This was followed by a 160% rise in the price of bitcoin over the next five months.
Likewise, as can be seen in the next chart, the golden cross has preceded multiple bullish streaks for bitcoin. Examples of this are those that occurred in February 2023, September 2021, May 2020 and April 2019..
Nevertheless, This pattern, like any indicator, is not infallible. On a few occasions, its formation was followed by a price drop due to unexpected environmental situations that affected demand. This occurred, for example, before the start of the covid-19 pandemic in February 2020, as the previous graph shows.
Therefore, it is crucial to keep in mind that, although the golden cross indicates optimism for the market, it does not ensure an upward trend. This will clearly depend on the supply and demand at any given time, so it is essential to consider the existing risks before operating.
2 events are approaching that boost bitcoin
At the moment, The demand for bitcoin has been motivated by the presidential elections planned in the United States for next week. The two main candidates in contention have shown their support for the digital asset industry, suggesting a friendlier regulatory environment.
Although, in the event of a victory for the Republican candidate, Donald Trump, the outlook looks more encouraging for the market. He has promised to maintain national reserves in bitcoin if he wins, turn the country into a center for the cryptocurrency industry and fire Gary Gensler, chairman of the SEC, for slowing the development of the ecosystem.
Therefore, with the increasing odds of Trump winning, according to bets on the Polymarket cryptocurrency platform, bullish expectations have increased. In addition, next week the decision on interest rates in the United States will also be presented.
As CriptoNoticias reported, Interest rates in the economic powerhouse are expected to drop 0.25%increasing the liquidity available to the markets. Therefore, this reinforces the possibility of an upward trend for bitcoin.
