On the bitcoin chart, 50- and 200-day moving averages crossed. The "golden intersection" of these two MAs is considered to be a bullish signal, but history does not always confirm this.
A popular crypto community trader Cryptowatch (@Cryptowat_ch) shared a daily bitcoin chart with readers demonstrating the “golden intersection”. He also highlighted two previous “golden intersections” on this timeframe.
Analyzed the former Bitcoin dynamics,he noted that the previous intersection was unsuccessful, however, he considers this a fairly common phenomenon and sees no reason to become a bear now on bitcoin.
“This is the second bullish intersection of the 50- and 200-day MA this year. Last year, after the golden crossing, the Bitcoin exchange rate grew by 160% +. After the failure in February, will the second attempt prove successful? ” - wrote Cryptowatch.
Let's try to figure out what to expect this time.
Previous correction
After Bitcoin noted the maximum in 2013, it began a long-term correction, which dragged on until January 2015. During this time, the market managed to form a “golden intersection” in July 2014. However, shortly after this, the price fell and continued to decline until January 2015. During these 186 days of drawdown, the currency fell by 75%.
Further on the chart two more “golden intersections” appeared in a row - in July and October 2015. After the first of them, the pair fell by 30% in 32 days. However, in October, the BTC rate began to grow rapidly and doubled in just 10 days.
It is noteworthy that the October "golden intersection" gave rise to an uptrend, which has been supported for more than two years and as a result has brought the price to the historical maximum established in December 2017.
Thus, in the period from December 2013 to 2017, the market formed three “golden intersections”. Two of them were continued by lower prices, and the third was the catalyst for a two-year bull trend.
Current correction
If we start the countdown from the maximum of 2017, we will find three more “golden intersections” on the daily chart of bitcoin, including the current one.
The first was formed in April 2019. After it, the price began to rise and strengthened by 210% in 65 days.
The other two are very reminiscent of the cases of 2015 described by us above. These two intersections also quickly appeared one after another - in February and in May 2020. After the February crossing, the price fell 62% in 24 days.
It is still unknown how the market will behave after the current intersection. If the price repeats the pattern emerging in 2015, then we can expect the launch of a long-term bull trend.
Comparison and conclusions
In both cases, two intersections are separated by similar time intervals - 90 and 83 days, respectively. However, the magnitude of the decrease in BTC after the first intersection in each of the patterns is different, reaching 60% now and only 30% earlier.
Thus, despite a number of similarities, it is impossible to talk about the complete identity of these “golden intersections,” and the historical price dynamics of Bitcoin as a whole does not give us enough data to make a confident prediction of how Bitcoin will behave further!
However, if the past pattern really repeats, this means that Bitcoin has already launched a new uptrend, which can last more than two years.
