Bitcoin’s (BTC) rally seemed to have stagnated below the $23,000 level as investors attempt to predict the next price movement. As uncertainty prevails, one technical indicator that investors are closely watching is the golden cross formation.
In this line, Bitcoin is on the verge of a potential golden cross formation pattern, as the 50-day moving average (MA) approaches crossing above the 200-day MA, crypto commentary Twitter account Bitcoin Archive shared on January 26.
One of the consequential golden crosses in 2019 resulted in Bitcoin surging in value when the asset was trading in the zone of $5,000. The resulting rally saw Bitcoin hit an all-time high of almost $69,000 in 2021.
Impact of the golden cross on Bitcoin
The golden cross is mostly a bullish indicator that suggests that the short-term trend of Bitcoin is shifting upward and could potentially lead to a sustained rally. Notably, the golden cross formation has historically preceded price increases in Bitcoin.
The market is likely watching this potential pattern, as it could signal the start of a new bull market for Bitcoin and other cryptocurrencies amid uncertainty regarding the general health of the digital assets market.
Overall, the approaching golden cross formation is a positive sign for the cryptocurrency market and could be a sign of a bright future for Bitcoin. At the same time, it will be of interest if it signals a sustained rally or just a temporary surge in value bearing in mind that other technical indicators point to bearishness in the short term.
On the flip side, as reported by Finbold, Bitcoin’s fortunes remain in limbo, with the maiden cryptocurrency starting at the dreaded death cross. The death cross occurs when the 50-day moving average drops below the 200-day moving average, indicating a bearish trend. In particular, as of January 25, on-chain data indicated that Bitcoin was facing the first-ever one-week death cross in history.
Furthermore, as crypto expert Steve Courtney stated, if Bitcoin realizes the one-week death cross, indicators point to a possible one-day golden cross on February 7.
Bitcoin price analysis
By press time, Bitcoin was trading at $23,113, gaining over 1.5% on the daily chart. On the weekly chart, BTC is up more than 10%.
At the same time, a summary of Bitcoin’s one-day technical analysis corresponds with the ‘buy’ sentiment gauging at 14, while moving averages are for a ‘strong buy’ at 13. Elsewhere, the asset’s oscillators are for ‘sell’ at 3.
It is worth noting that Bitcoin continues to face resistance at $23,000, and breaching the level can potentially open room for further rallying.
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