IMPORTANT POINTS:
- Bitcoin has formed its third gold cross, considered a bullish sign for the cryptocurrency.
- The previous gold cross led to significant price increases, although the last cycle took longer due to exceptional factors.
- The current volatility and technical indicators suggest near-term uncertainty, but there is a general consensus on Bitcoin’s growth potential.
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Bitcoin (BTC) has held its value below the $30,000 mark, failing to break above the key resistance level amid extended consolidation across the broader market. However, technical analysis of Bitcoin suggests that the asset could be on its way to another all-time high.
The Golden Cross – A Bullish Symbol
Notably, pseudonymous cryptocurrency trading analyst TradingShot, in a post on TradingView on Aug. 4, noted that the top cryptocurrency has just completed its third gold cross ever, a long-term bullish sign.
According to the analysis, the previous two instances of the pattern led to significant increases in the price of Bitcoin. After the crossover occurred, the 200-day moving averages calculated on a three-day time frame (3D MA 200) became a crucial support level, helping to sustain the uptrend.
However, it is worth noting that the exceptional circumstances of the March 2020 coronavirus crash, which was likened to a Black Swan, caused a temporary break in the typical pattern.
Drawing parallels to previous cycles, the analyst emphasized that with the 3D MA50 guiding price action, the next likely target for Bitcoin’s upward move would be its all-time high of $69,000.
Furthermore, he attributed the relatively faster gold cross in 2019 to the “Libra euphoria” and other positive fundamentals that contributed to the increased adoption of Bitcoin. On the other hand, in 2020, reaching the all-time high took a bit longer, around 100 days longer than the previous cycle.
“It might be a fair estimate that Bitcoin would have reached the current ATH ($69,000) around this time next year.”
What’s next for Bitcoin after the gold cross?
The gold crossover pattern occurs when a short-term moving average crosses above a long-term moving average. In the case of the recent Bitcoin gold cross, the price was trading above the 3D MA50 and 3D MA200, indicating a positive change in trend for the digital asset.
In general, the Bitcoin price has experienced volatility recently, and the impact of the gold cross is seen as a sign of optimism in the asset’s price trajectory. Notably, there is a consensus on the possibility of Bitcoin reaching new highs.
As Finbold reported, a significant number of Bitcoin holders (69.2%) have no intention of selling their assets, preferring instead to hodling them. At the same time, the amount of Bitcoin sent to exchanges has also decreased in recent weeks.
It is anticipated that the next Bitcoin halving, scheduled for 2024, could trigger the start of a new market cycle. In the short term, Bitcoin faces the threat of falling further below the $29,000 mark. A report indicated that machine learning algorithms project the asset is likely to trade at $28,000 by the end of August.
At time of writing, Bitcoin was trading at $29,014 with minor gains of less than 0.1% over the past 24 hours.
On the other hand, under technical analysis, as retrieved from TradingView, the indicators suggest a downtrend. Meanwhile, with volatility prevailing, the market is interested in how Bitcoin will react in the short term.
