Seventh Golden Cross of Bitcoin – How Does This Affect the Price of BTC?

Bitcoin is about to reach its seventh “golden cross” in the last ten years. This is because of its recent rally, which has caused it to rise more than 40% since the beginning of the year. A technical event called a “golden cross” happens when the 50-Day Simple Moving Average (SMA) crosses above the 200-Day SMA. Some traders and technicians see a golden cross as a sign to buy or, at the very least, as a sign that price momentum has shifted in a bullish direction.

How has Bitcoin changed since the Seventh Golden Cross of Bitcoin?

If you bought Bitcoin at each of the last seven golden cross events and kept it for 90 days, you would have made money four out of the seven times. The difference between these gains would have been anywhere from 10% to 80%. After 90 days, you would have been flat one out of every seven times, and you would have been down twice (by 20% and 45%).

If you had held for 365 days, five out of seven times, you would have won. Again, the size of gains over this time period can be anywhere from 25% to 400%, which is a vast range. The two times you would have been down after a year was during the terrible bear markets in 2014 and early 2015 and in late 2021 and late 2022.

If you adjust the buy signal to only buy when a golden cross occurs at the end of a long bear market and not during a volatile bull market, the results may be more bullish. If you bought after the golden crosses in July 2015, October 2015, and April 2019 and held them for a year, you would have made 130%, 120%, and 25%.

The 50-Day SMA has been below the 200-Day SMA for a long time, just like it was in these other situations. Imagine that at the time of the coming golden cross, the price of Bitcoin stays between $23,000 and $24,000. Based on how things have gone in the past, a 100% gain in the next year is possible. So it’s possible that Bitcoin will be worth around $40,000 in early 2024.

Assuming that the price of Bitcoin, the most valuable cryptocurrency by market capitalization and the first successful application of cryptographically secured blockchain technology, does not drop by more than 30% all at once and for an extended period of time, Bitcoin’s 50-day SMA should cross above its 200-day SMA in about a month.

Is the Bear Market for Bitcoin over?

When you think about these things, it’s easy to see how Bitcoin’s price could go up so much in the next year.

First, there is an increased probability that the current state of the economy will improve in 2023 rather than deteriorate, which is often favorable for a cryptocurrency (like 2022 was). The Federal Reserve stated earlier this week that inflation appears to be declining at a rapid pace, which explains why this is the case. The Federal Reserve is getting close to the conclusion of its cycle of raising interest rates and may even drop them before the end of the year in order to support an economy that may shortly enter a recession.

Also, Bitcoin’s bear markets only last about a year on average, and there are now multiple on-chain and technical signs that the bottom of the 2022 bear market is in.

Even so, the long-term trends in Bitcoin’s wider adoption (by users and investors) continue to be positive, and the asset should soon gain more legitimacy like regulators in key markets (like the U.S, the United Kingdom, and the European Union) work to bring in comprehensive crypto market laws. Therefore, the arrival of a second golden cross is still another reason why the bear market in bitcoin has come to an end.

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