A bitcoin worth indicator is about to flip bullish for the primary time because the early levels of the 2016-17 bull market.
The 50-candle shifting common (MA) on bitcoin’s three-day chart is in a strong upward trajectory and appears set to cross above the 200-candle MA within the subsequent few days.
That could be the primary golden crossover on the three-day chart since early February 2016. CoinDesk reported on a golden cross for bitcoin’s every day chart again in April.
Seasoned merchants usually refer to that long-term bull market sign as a lagging indicator. After all, the MA research are primarily based on historic knowledge and have a tendency to lag costs, which additionally means they’ve restricted predictive skills at greatest.
While 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 prior 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 worth charted its method to a file excessive of $20,000 by December 2017.
A more in-depth have 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 take a look at once more. In reality, the 50-candle MA persistently reversed pullbacks (marked by arrows) all through the rise from $360 (February 2016 low) to the file 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 produce a bull cross a minimum of three quarters forward of the reward halving, due someday in May 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 situated at $6,566 and the 200-candle MA is flatlined at $7,438.
The golden crossover will possible occur earlier than the month finish, except costs drop all the best way again to $5,000, dragging the 50-candle MA decrease. That, nonetheless, is unlikely to occur anytime quickly.
If historical past is a information, then the affirmation of the golden crossover may very well be adopted by a rally to file highs above $20,000. Further, all through the rally, the 50-candle MA will possible function sturdy help.
Disclosure: The creator holds no cryptocurrency property on the time of writing.