Many traders and technicians closely follow the well-known “Golden Cross” moving average crossover in major liquid markets such as Bitcoin, Gold and the Nasdaq 100 Index. Today, however, we will examine an under-the-radar Bitcoin moving average crossover that is imminent. Using Bitcoin’s reliable data from 2011 through today, let’s see if this lesser-known moving average crossover looks bullish or bearish going forward.
This lesser-known moving average crossover could hit soon
While the Golden Cross occurs when the 50-day easy moving average crosses the 200-day easy moving average, Bitcoin’s 50-day easy moving average (50MA) currently appears poised to break above its 100-day easy moving average (100MA). come within days. Earlier this year, Bitcoin’s 50MA surpassed its 100MA as the number one crypto by market capitalization surged in January from its post-FTX collapse lows. Further Bitcoin gains followed from this most recent crossover.
Bitcoin Daily Chart | BTCUSD at TradingView.com
With Bitcoin extending its gains to date in recent sessions, the 50MA seems poised to move back above the 100MA. Aside from the signal earlier this year, what happened in the past when Bitcoin’s 50MA crossed the 100MA?
Sixty Days and Beyond looks bullish
To find out, we look at all the signals since 2011 and add an additional condition that better describes the current market conditions regarding Bitcoin. Our additional condition requires that Bitcoin’s must be 100MA rising, meaning the average closed at a value greater than the day before when the 50MA crossed the 100MA. This additional requirement filters out 50MA > 100MA crossovers during periods of downward price momentum and better describes Bitcoin’s current technical state.
While the holding time graphic below illustrates Bitcoin’s historical tendency to continue rising after such signals, hypothetical gains don’t seem impressively small with short holding times of seven to 15 days, up just +1.8% and +1.1% respectively. .9%. Moving to a 30-day holding time, the +10.4% average trade looks much more promising.
Bitcoin Waiting Statistics | SOURCE: Table
However, from a medium-term perspective, the average trading metric jumps significantly higher with hypothetical gains ranging from +45.7% with a 60-day hold to +170.9% with a 90-day hold.
Going back to the early 2023 signal and assuming a 90-day hold (1/25/23 to 4/25/23), Bitcoin’s recent 50MA >100MA crossover gained a respectable +22.7%. While clearly below the average trade value for the entire history of these crossover signals, Bitcoin could be poised for potentially higher prices if it can reclose 50MA above its rising 100MA.
DB the Quant is the author of the REKTelligence report newsletter on Substack. To follow @REKTelligence on Twitter for evidence-based crypto market research and analysis. Important Note: This content is strictly educational in nature and should not be considered investment advice. Featured images created with Tableau. Charts from TradingView.com.