Bitcoin, XRP and Ethereum, three of the most dominant coins in the cryptocurrency market, are about to form a 3-day “golden cross” at the same time. According to analyst Tony Spilotro, this signal is rare and has only occurred a handful of times in the past for each asset. However, all three of these major cryptocurrencies have never triggered this signal at the same time. So what exactly does this mean and what are the results of the 3-day golden cross?
Bitcoin, XRP and Ethereum lead market recovery
The outlook for the crypto market is much less bleak than it was a few weeks ago. Because BlackRock and other institutions that want to launch Bitcoin ETFs have come to the fore. Also critical was XRP and Ripple’s massive victory over the US Securities and Exchange Commission (SEC). Even the technical environment is starting to show signs of a possible uptrend. Notably, many of the top cryptocurrencies are approaching the golden cross in the 3-day timeframe, which has only happened a few times in the past.
Three top crypto assets — #Bitcoin, Ethereum, and #XRP — are on the brink of a golden cross on the 3-day timeframe
All three firing at the same time has never happened before
It will also be the third in history for BTC and XRP, second ever for Ether pic.twitter.com/bzVfK3ZpBp
— Tony "The Bull" (@tonythebullBTC) July 19, 2023
This is about to happen simultaneously for the first time in their history for Bitcoin, Ethereum and XRP. Previously, these signals had come at different stages of previous bull markets. A stronger rally did not begin until all three coins crossed the gold level.
What is a golden cross?
A golden cross occurs when a higher timeframe moving average, typically a 200-period moving average (MA), crosses below the top of a lower timeframe moving average, usually a 50-period MA. In contrast, a “death cross” occurs when the two intersect from top to bottom. These crossovers create a buy or sell signal in a moving average-based trading system. Such systems are designed to capture the majority of a trend. However, it tends to miss most of the early part of a rally as it awaits confirmation.
The only time the signal went down was with Bitcoin in 2019. In all other cases, the buy signal, which used nothing more than a simple moving average crossover, was wildly profitable with limited downside. In 2015, the BTCUSD 3-day golden cross delivered over 2,000 percent ROI before it went down and gave the corresponding sell signal. XRP’s shift from gold cross to death cross retained more than 9,000 percent of the uptrend’s gains. However, Ethereum never gave a signal at that time due to its scant price history.
What happened in the past?
By 2019, Bitcoin suffered a long decline following the buy signal. Neither XRP nor Ethereum triggered a signal until 2020, when the entire crypto market started to rise together. The 2020 ETHUSD golden cross delivered over 1100% ROI before closing the death cross position. XRP failed to reach its all-time high. However, the golden cross still provided a 200 percent ROI.
Even though Bitcoin fired up and took a dip in early 2019, the buy signal was ultimately still effective, maintaining a 550 percent return on investment (ROI) until a death cross caused the position to close. Across the five historical buy signals, an average ROI of 2,570 percent was achieved when the gold cross formed. Although such returns are unlikely to be achieved in the future, this indicates that the signal is effective. Meanwhile, it is worth noting that the volume of Bitcoin, ETH, and XRP is well ahead of other altcoins, as can be seen in the chart below.
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