Bitcoin (BTC), the world’s largest cryptocurrency by market value, has achieved a rare golden cross on its weekly chart. This technical indicator occurs when the 50-week moving average (MA) crosses above the 200-week MA, signaling a possible long-term uptrend, according to Barchart, a leading market data and analysis provider.
A golden cross is considered a bullish pattern by traders, as it shows that the short-term momentum of an asset is stronger than its long-term trend. It also implies that the asset has overcome a period of weakness and is ready to resume its growth.
According to Barchart, this is the first time that Bitcoin has formed a golden cross on its weekly chart. The last time it came close to this was in May 2019, when the 50-week MA briefly touched the 200-week MA but failed to cross above it.
While the Golden Cross is generally seen as a positive sign, it does not guarantee future performance. In fact, some analysts argue that the Golden Cross is a lagging indicator, reflecting the past rather than the future. By the time the golden cross happens, the market may have already priced in the bullish sentiment, and the asset may be due for a correction.
The on-chain data analytics firm Lookonchain has attributed this decline to F2Pool, a large mining pool, depositing 1,000 BTC to Binance, a major cryptocurrency exchange, for the second time in two days. This suggests that there is significant selling pressure in the market, which could lead to further price volatility.
Spot Bitcoin ETFs’ Potential
Despite the current price fluctuations, Bitcoin enthusiasts are hopeful that a major catalyst could revive the bullish momentum: the approval of spot Bitcoin ETFs. Spot Bitcoin ETFs are exchange-traded funds that track the price of Bitcoin directly rather than through derivatives or trusts. They are seen as a way to attract more institutional and retail investors to the cryptocurrency space, as they offer lower fees, higher liquidity, and better regulatory oversight.
According to Katie Greifeld, a finance reporter for Bloomberg, ETF issuers have a deadline to submit their S-1s, the registration statements for new securities, and the SEC is expected to vote on the 19b-4 applications, the requests for rule changes to list the ETFs, soon. If both documents are approved, spot Bitcoin ETFs could start trading almost immediately, which could boost the demand and price of Bitcoin.
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