Where are we now – Some words as introduction
First it is fair to say, that we have had a wonderful time in the crypto market where everyone was a scientist, a magician and each and every prediction was exactly doing the move some of the youtubers mentioned. It is always easy to make money in an uptrend when you take one of the important rules. Follow the trend and trade profit. I also want to mention that I am only talking about SPOT trading. Leverage is a now go for me, because it can wrack you faster than light..
Now we are not really in a bull market. I mean some of them will tell you we are. But let`s look at the facts. We have lost nearly 50% since mid of May 2020 and some people lost a lot of money. However, this is crypto with the volatility we are all here for. Because volatility is also an option to make gains and if you take it, it will generates you some profit. Remember last March 2020, when the pandemic hit the ecosystem of the world. Everything was going down by at least 50%. Therefore, it is at this time in the crypto universe.
Coming back to the topic of my article. I wanted to give you a simple overview about some prominent indicators, or better figures in the charts.
The Golden Cross:
For the golden cross you need one the MA (Moving average) indicator. Use one MA and set it to 50 and the other one to 200. I will do this example in the Polkadot (DOT) chart. Because you see Bitcoin all the time.. As you can see in this example the MA(50) crosses the long term MA(200). Which was sometime right and was followed buy a period where the price has gone up.
More technically it means, we are talking about a Golden Cross when a short-term moving average crosses over a major long-term moving average. In this example when the blue line crosses the yellow one from the bottom to the upside it could indicate an uptrend. But please be aware of fake outs. Because it is not always working. Look back in the charts and you will see that the golden cross is sometimes more or less a copper cross.
As you can see, the indicators are forming a golden cross. But in reality it is a fake cross. What the blue crossing the yellow line. I placed the arrow a little bid left. As you can see after a while the price goes down. Yes there is a small death cross on the right hand side. But then you bet on the golden cross you lost your money in this situation, because the death cross is a while later.
Death Cross
Yes and the death cross is the opposite of the golden cross. Which means the shorter signal (the MA50) crosses the longer signal (MA200) from top to bottom. Which could be an indicator to sell or to go short. Depends on your strategy.
To sum It up
A golden cross and a death cross are exact opposites. A golden cross indicates a long-term bull market going forward, while a death cross signals a long-term bear market. Both refer to the solid confirmation of a long-term trend by the occurrence of a short-term moving average crossing over a major long-term moving average.
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