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Previous instances of âgolden crossâ and âdeath crossâ events show that despite mixed behavior thereafter, the precedent for Bitcoin price volatility is clear.
Bitcoin (BTC) may not see a 170% increase after its fifth âgolden crossâ price event, historical data suggests as markets stay down 8%.
Analysis of price movements since 2009 shows Bitcoin has had a total of ten âgolden crossâ and âdeath crossâ moments in its lifespan.Â
BTC price dip challenges December 2017
A âgolden crossâ is when BTC/USD sees its 50-day moving average rise to cross over its 200-day moving average. A âdeath crossâ is the opposite.Â
As Cointelegraph reported, hopes are currently high that the most recent golden cross will spark an identical reaction to the previous one â a 170% price surge in just two months.Â
Overall, however, two out of four golden crosses have resulted in gains, while the other two in fact saw price losses. Similarly, some death crosses were followed by price gains.
Bitcoin traders continue to dig for answers after BTC/USD abruptly dropped $1,000 in under an hour this week. The event came just days after the golden cross and represents Bitcoinâs fifth-largest drop ever.
âThe only other time we've seen a greater dollar price drop is at the Dec. 2017 peak,â Yassine Elmandjra, an analyst at investment advisory firm ARK, noted on Thursday citing data from Coin Metrics.
Bitcoin 5-year price chart with 50 and 200-day moving average. Source: TradingView
10% losses and 170% gains
Nonetheless, some remain convinced that despite current reluctance to reclaim even $10,000, Bitcoin is still set to reap the benefits of the moving average behavior.
âLook what happened after the previous golden cross. First, it dumped around 10% and then it pumped 170% in 60 days,â one Twitter commentator noted, sharing a two-year chart of BTC/USD crosses, adding:
âIf history repeats we will see the price of #bitcoin around 25K before April.â
$25,000 would represent a new all-time high for Bitcoin and is in line with predictions from figures such as Fundstratâs Tom Lee for 2020.Â
The technical hypothesis, however, gives a much more conservative outlook for this year. According to the celebrated stock-to-flow model, between now and Mayâs block reward halving, Bitcoin should trade at an average of $8,600.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.