Bitcoin is once again very close to making a new history. On the leading cryptocurrency weekly chart, the ‘Golden Cross’ is approaching, an event that has never happened before. According to crypto analyst Jakub Dziadkowiec, a new bull market for BTC may be imminent.
The first ‘Golden Cross’ in Bitcoin history
The Golden Cross is a fundamental signal of technical analysis. Classic Golden Cross and Death Cross are determined on different time frames by the interaction of two long-term 50-period and 200-period moving averages. Naturally, when it comes to the weekly chart, the 50-week moving average (50W MA, orange) and the 200-week moving average (200W MA, blue) are considered. The higher the range, the more important the signal for the long-term price action of the asset.
Since the beginning of BTC price action, the 50W MA has never dropped below the 200W MA. This showed that he was a strongly ascendant being. The first Death Cross in BTC history only appeared earlier this year (red circle). This is because BTC price action is strongly weakening throughout 2022. It was also a 77% drop against the November 2021 ATH.
Interestingly, in previous bear markets in 2014 and 2018, Bitcoin price’s decline from historical ATHs was deeper. These amounted to 86% and 84%, respectively. However, these periods were not followed by a Death Cross. Because previous bull markets created much larger increases. This resulted in a much larger distance between the 50W MA and the 200W MA. So the first MA failed to fall below the second.
BTC chart / Source: TradingviewIs the worst period over?
It is possible to look at the chart above from a slightly different perspective. In this case, we see an additional argument for a new bull market in cryptocurrencies. This argument comes from the 50W MA’s own movement in relation to historical BTC price action. So far, four moments can be identified (green arrows) when the 50W MA reverses direction and starts to rise after long-term dips. These took place in July 2012, November 2015 and May 2019. The fourth upward bounce of this moving average happened last month.
Now if we put these events side by side with the BTC trading history, we notice a certain regularity. Namely, whenever the 50W MA started a bounce, the bear market had already ended. Also, Bitcoin had reached a macro bottom (red circles). If this rule also applies to the current cycle, the November 2022 FTX crash and the $15,600 BTC price will mark the end of the long-term declines. Therefore, the 50W MA bounce is another argument for starting a new bull market for the entire crypto industry.
BTC chart / Source: TradingviewWhen will the Golden Cross for BTC take place?
If a long-term bull market has truly begun, it’s only a matter of time before the Golden Cross appears on the Bitcoin weekly chart. The available data provides some insight into when this bullish event will occur. As you follow on Kriptokoin.com, the first weekly Death Cross took place on February 13, 2023. The descending 50W MA has crossed the 200W MA to the downside. However, as a result of the increase in BTC price since the beginning of this year, after just 14 weeks, the 50W MA is back. It resumed its upward trajectory on May 22.
Assuming the Golden Cross will follow the same 14-week period, we can expect this event on August 28. Of course, the slope of the 50W MA and the speed of its eventual return above the 200W MA will also depend on the future price action of BTC. However, suppose the behavior of the 50W MA shows historical similarity to the previous 3 cycles. In this case, the end of summer will see the first Golden Cross in Bitcoin history on the weekly chart.
BTC chart / Source: Tradingview
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