Bitcoin’s Golden Cross Triggers Bull Market Alarm Bells—Again

Bitcoin just flashed its most reliable buy signal—the golden cross—as the 50-day moving average punches through the 200-day. Cue the institutional FOMO.

History rhymes: The last three golden crosses preceded rallies of 200%+, but Wall Street’s ’this time it’s different’ chorus is already warming up. Never mind that 90% of BTC is still held by diamond-handed degenerates.

Pro tip: When your fund manager suddenly starts ’understanding the blockchain thesis,’ check your wallet. And maybe your drink.

Golden Cross and Bitcoin

Technical analysts suggest that a golden cross indicates that short-term prices are faring better compared to long-term trends. While the occurrence of this formation has sparked discussions about a potential new bullish movement in Bitcoin$104,739, it’s crucial to note that this indicator does not always yield the expected results. The anticipated golden cross is emerging following a recent “death cross,” which often associates with a downward trend but has proven misleading in earlier instances.

A similar situation transpired in August and September 2024. Back then, Bitcoin’s price experienced a short-term dip following a death cross, only to rise again with the subsequent golden cross. As a result, Bitcoin surpassed $70,000 in early November and reached an all-time high in January.

Despite fluctuations in technical indicators, macroeconomic developments are also known to influence Bitcoin’s pricing. Analysts emphasize the psychological impact of technical formations on investors, although prices are not determined solely by these indicators.

US Credit Rating Downgrade

Credit rating agency Moody’s announced on Friday that it has downgraded the US’s credit rating from the top level of “AAA” to “AA1.” Moody’s cited increasing national debt and sustainability risks in public finances as reasons for this decision, with the total US debt reaching 36 trillion dollars.

Moody’s statement: “Due to increasing national debt and sustainability risks, the US’s credit rating was downgraded.”

Moody’s highlighted that the increase in the US debt level has raised concerns in global markets. We’ve previously noted that these risks have been priced in the bond market, with US bond yields remaining high for a prolonged period.

In the past, rising bond yields and the spotlight on the US’s long-term financial risks had boosted interest in cryptocurrencies and alternative investment vehicles, particularly Bitcoin.

Bitcoin’s price trajectory appears to be influenced by both technical and macro developments. A movement parallel to previous golden cross formations may occur soon, but economic risks and debt concerns are also crucial in shaping investors’ decisions. Investors are advised to consider that technical indicators, alone, do not guarantee definitive outcomes, and broader economic changes can also determine the pricing of assets like Bitcoin.