The previous cross, which saw the daily 50 EMA move above the daily 200 EMA, preceded a 175% rally to the upside in the following two months as hype surrounding Facebook’s proposed cryptocurrency Libra spread across the entire market.
The same moving averages crossed back to the downside in November, which resulted in a subsequent 25% drawdown to as low as $6,400.
The next key hurdle for Bitcoin to clear if the golden cross is to come to fruition is the psychological $10,000 level of resistance.
A clear breakout above that level on significant volume would be the first indication that Bitcoin is in a bullish posture, with suggestions that it could surge past $14,000 before May’s halving event.
This has historically caused the price of Bitcoin to rise dramatically as miners are incentivised to drive the price to the upside in order for the industry to remain profitable.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.