While Bitcoin seems well on its way to an upward trajectory, bullish signals are popping up everywhere. But before getting carried away, it is important to take a step back: the famous “golden cross” is about to occur, but its effectiveness could well be overestimated. This phenomenon, where the 50-day moving average crosses that of 200 days, has nevertheless left a bitter taste during certain past episodes. Let's see why it is necessary to be careful.
The “Golden Cross”: Bullish signal or ephemeral mirage?
Crypto traders often get excited about the golden cross, which usually signals a potential uptrend. But such enthusiasm is not always justified. Certainly, the crossing of the 50 and 200 day moving averages indicates that recent rises in the price of Bitcoin (BTC) have gained momentum.
However, this signal remains a lagging indicator: it reflects the past without predicting the future.
In fact, the results of previous golden crosses on Bitcoin have been varied:
- Sometimes a sharp rise followed the signal;
- At other times, the price remained stable;
- In some cases, it even backed down shortly afterward.
The volatility of crypto, combined with its keen sense of unpredictability, makes interpreting this signal tricky.
Crypto traders: Beware of the pitfalls of optimism!
Less experienced crypto traders might be tempted to jump at the opportunity, without appreciating the limits of the indicator. LThe golden cross often attracts speculative buyingfueling short-term volatility impacting BTC purchasing. However, itThis does not guarantee a change in trend in the long term.
In reality, the market also reacts to macroeconomic factors, global sentiment and on-chain data. Therefore, relying solely on the golden cross can be riskyespecially when ambient instability takes over.
Finally, let's not forget that in February 2023, a similar golden cross sparked lively debates. Some saw it as a buying signal while others remained skeptical, recalling that caution is the mother of safety in the world of trading.
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