A bitcoin value indicator is about to show bullish for the primary time for the reason that early phases of the 2016-17 bull market.
The 50-candle transferring common (MA) on bitcoin’s three-day chart is in a stable upward trajectory and appears set to cross above the 200-candle MA within the subsequent few days.
That might be the primary golden crossover on the three-day chart since early February 2016. CoinDesk reported on a golden cross for bitcoin’s day by day chart again in April.
Seasoned merchants usually check with that long-term bull market sign as a lagging indicator. In any case, the MA research are based mostly on historic information and have a tendency to lag costs, which additionally means they’ve restricted predictive talents at finest.
Whereas that’s true for many crossovers, the one that’s about to occur on the three-day chart has proved its mettle as a dependable bull market indicator up to now.
Three-day chart (2016-2017)
The 50- and 200-candle MAs produced a bullish crossover in three days to Feb. Three, 2016, following which bitcoin’s value charted its approach to a document excessive of $20,000 by December 2017.
A better take a look at the chart reveals that the low of $360 printed just a few weeks earlier than the golden crossover was by no means put to check once more. In actual fact, the 50-candle MA constantly reversed pullbacks (marked by arrows) all through the rise from $360 (February 2016 low) to the document excessive of $20,000.
What’s extra, the bullish crossover occurred 5 months forward of the mining reward halving of July 2016 and 13 months after bitcoin bottomed out close to $150.
This time the MAs are about to supply a bull cross no less than three quarters forward of the reward halving, due someday in Could 2020, and seven months after the bear market ran out of steam close to $Three,100.
Three-day chart (2019)
As of writing, the upward sloping (bullish) 50-candle MA is positioned at $6,566 and the 200-candle MA is flatlined at $7,438.
The golden crossover will doubtless occur earlier than the month finish, until costs drop all the best way again to $5,000, dragging the 50-candle MA decrease. That, nevertheless, is unlikely to occur anytime quickly.
If historical past is a information, then the affirmation of the golden crossover could possibly be adopted by a rally to document highs above $20,000. Additional, all through the rally, the 50-candle MA will doubtless function sturdy assist.
Disclosure: The writer holds no cryptocurrency belongings on the time of writing.
Bull’s eye picture by way of Shutterstock; charts by Buying and selling View