According to a Twitter survey conducted by crypto bull Thomas Lee, 24% of Crypto Twitter inhabitants believe that the signal, which typically hints at a bull run ahead, is a trap and that it is time to unload some Bitcoin. A golden cross occurs when a 50-day moving average crosses the 200-day moving average from under on the daily chart.
Being a typically-bullish signal, it did not come as a surprise for the largest number of respondents to say it is a good time to buy. However, it was not by a convincing margin. Only 43% of the respondents said the golden cross was a green light to purchase in anticipation of a imminent Bitcoin price rally.
Despite the survey, the formation of Bitcoin’s first golden cross since October 2015 has been greeted with excitement. Based on precedent, a bull run could be in the works. After the last golden cross, the bull run lasted until early 2018.
Sentiment has also turned bullish, and this is supported by factors other than technical analysis. Data compiled by forex exchange firm DailyFX also revealed that 81% of retail traders are now net-long bitcoin.
With altcoins, the percentage of retail traders who are net-long is even higher. About 97.7% of retail traders are net-long Ripple (XRP) while 92.2% are net-long Litecoin. Around 92.1% are net-long Ethereum.
EToro Senior Market Analyst Mati Greenspan opines that a bull run has been confirmed. This is based on the fact that Bitcoin has broken the $5,350 resistance level, turning it into a new support area:
“Some people will want to wait until today’s close for confirmation but in my mind, this box is ticked. Following the extraordinary surge on April 2nd, many people were looking for some sort of continuation and now that we’ve broken the interim resistance of $5,350 it seems we have one.”
In some quarters though, the formation of the golden cross has been greeted with skepticism. Even in Lee’s survey, 19% indicated that they had no faith in technical analysis, calling it “voodoo.”
As proof of the unreliability of using technical analysis to predict prices of tradeable assets, crypto trader @cryptorandyy pointed out that there had been another golden cross in July 2015, which ended with the Bitcoin price nosediving by nearly 50%.
Last modified: March 4, 2021 2:44 PM