The forthcoming price pattern would signal a strengthening of bullish momentum.
It's important to note that while these indicators are closely monitored by trend-following traders, they rely on historical data and do not consistently provide clear signals of bullish or bearish trends. Bitcoin has encountered nine golden crosses in its history, but three of these, which occurred on July 11, 2014, July 15, 2015, and February 19, 2020, were ultimately invalidated within three months by death crosses, leading to significant downtrends.
A trader who maintained a long position for a year after the occurrence of the first two golden crosses, along with the one in May 2020, would have seen their investment grow by triple-digit percentages.
Following the September 2021 golden cross, Bitcoin surged to an all-time high of $69,000 within a few weeks, only to almost completely erode those gains within three months, ultimately resulting in a death cross.
The upcoming golden cross has the potential to align with its historical reputation, given the positive sentiment surrounding the possible launch of a U.S.-based spot exchange-traded fund (ETF), increased macroeconomic uncertainty, Bitcoin's rising attractiveness as a safe-haven asset, and the forthcoming halving of mining rewards in the next year.
Golden cross indicates a bullish shift in long-term trend. (TradingView/CoinDesk) (TradingView/CoinDesk)
According to an email from Toronto-based crypto platform FRNT Financial on Wednesday, halvings are considered to have a positive impact on BTC's price. They achieve this by diminishing the selling pressure from miners and slowing down the rate at which BTC's supply is expanded.
