With Bitcoin approaching the $60,000 level once again, crypto traders are paying close attention trying to confirm that the rally from $29,000 hasn't been just a retracement on the way down, rather than a continuation of the bull rally that began last year.
One indicator that supports the latter is the impending “golden cross,” which is the crossing of the 100-day moving average above the 200-day moving average. Traditionally, the golden cross is considered a medium to long-term bullish confirmation. The last it happened was in June of 20200, right before Bitcoin went from under $9,000 up to all-time highs above $64,000.
Breakout coming? Image via Yahoo.com
As it stands, Bitcoin is likely less than a week away from another golden cross taking place, assuming price doesn't collapse from here.
A golden cross doesn't necessarily mean that Bitcoin has to make all-time highs. In 2019, BTC more than doubled in price after a golden cross but ended up topping out just under $14,000, 35% below all-time highs.
This time however, the golden cross is occurring with BTC much closer to all-time highs, after a much shorter downtrend. A tweet from crypto trader Flibflib from Decentrader also supports the idea that Bitcoin is setting up for a significant price rise. Using Fibonacci extensions in a comparison to a previous retracements, Flibflib creates a fractal that suggests BTC breaches $72,000 in the next couple of months, before flying up to key levels at $87,000 and $100,000.
Though it doesn't seem so far-fetched, the trader still notes that it's “hopium” until proven otherwise.
“Hopium – nothing more, nothing less.
A bit of good news coupled with the stubborn hodlers though and it's possible.. stranger things have happened.
I wouldn't want to be heavily levered in either direction rn.”
With Bitcoin officially making a higher low and soon a higher high on the daily timeframe, many traders are likely waiting for a retracement before placing long positions on BTC. Flibflib says that while his head is telling him that $48,000 seems like a logical target, he's having trouble justifying it.
“My head says 48 but there don't fundamentally really seem to be any sellers beyond what's on the exchanges. idk, I'm 50/50.”
He also says there's too many overwhelmingly bullish factors for Bitcoin right now to remain bearish.
“We are above the 50 [daily moving average], with a golden cross, above the 20, 100, 200 [weekly moving averages], suffering a supply shortage, facing inflation in the economy, increasingly dystopian government laws, JPMorgan telling you to sell, your friends aren't calling about buying. AND YOU'RE STILL BEARISH. NGMI.”
