Bitcoin’s price chart is echoing a bullish pattern that foreshadowed the late 2024 price surge from $70,000 to $100,000 amid mounting concerns over the sustainability of the U.S. debt. A golden cross is imminent, aligning macro factors with a bullish technical setup.
Bitcoin’s Bullish Pattern: A Repeat of the Past?
Bitcoin’s price chart is echoing a bullish pattern that foreshadowed the late 2024 price surge from $70,000 to $100,000 amid mounting concerns over the sustainability of the U.S. debt.
Bitcoin is a decentralized digital currency created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto.
It uses cryptography to secure and verify transactions, allowing peer-to-peer transfers without the need for intermediaries.
As of 2022, Bitcoin has become one of the most widely accepted cryptocurrencies globally, with over 18 million users and a market capitalization of over $1 trillion.
Golden Cross and Death Cross
A golden cross occurs when the 50-day simple moving average (SMA) of prices crosses above the 200-day SMA, suggesting that the short-term trend is outperforming the broader trend. This pattern has a mixed record of predicting price trends. However, the impending golden cross, which is about to occur weeks after its ominous-sounding opposite, the death cross, trapped bears on the wrong side of the market.
The golden cross is a technical analysis pattern that indicates a potential bullish trend.
It forms when a stock's price breaks above its 50-day moving average and simultaneously crosses above its 200-day moving average.
This pattern is considered a strong buy signal, as it suggests a shift from a bearish to a bullish market sentiment.
According to historical data, the golden cross has been a reliable indicator of future price increases, with many stocks experiencing significant gains following this pattern.
A Bear Trap in Early April
Prices turned higher in subsequent weeks, eventually beginning a new uptrend after the appearance of the golden cross in late October 2024. A similar sequence unfolded from August through September 2024, setting the stage for a convincing move above $70,000 in early November. Prices eventually set a record high above $109K in January this year.
Moody’s Downgrade Validates Bond Market Concerns
On Friday, credit rating agency Moody’s downgraded the U.S. sovereign credit rating from the highest ‘Aaa‘ to ‘Aa1‘, citing concerns over the increasing national debt, which has now reached $36 trillion. The bond market has been pricing fiscal concerns for some time.
Bitcoin as a Hedge
The bullish sequence is being repeated since early April, and prices could begin the next leg higher following the confirmation of the golden cross in the coming days. As bitcoin’s price nears this golden cross, it’s worth noting that macro factors seem aligned with the bullish technical setup. Furthermore, persistent elevated Treasury yields have reflected expectations for continued fiscal splurge and sovereign risk premium, both bullish for bitcoin.
Past Performance Does Not Guarantee Future Results
While past performance does not guarantee future results, and technical patterns do not always deliver as expected, the alignment of macro factors with this bullish technical setup is worth noting. The bond market’s concerns over U.S. debt are now being reflected in a surge in Treasury yields, which can have a bullish effect on bitcoin’s price.
The golden cross has been a reliable indicator of bull markets in the past, although its reliability is not guaranteed. As with any technical pattern, it’s essential to consider multiple factors and perspectives when making investment decisions.
