October 31, 2023
In a recent strategy session, crypto trader Benjamin Cowen highlights a key indicator that suggests a potential correction in the price of Bitcoin (BTC). This indicator, known as the golden cross, has historically signaled a price decline in the past. In this article, we will explore what the golden cross is, its significance, and what it could mean for the future of Bitcoin.
The golden cross is a technical analysis pattern that occurs when an asset's 50-day moving average (MA) crosses over its 200-day moving average. It is typically viewed as a bullish signal, indicating a potential upward trend in the asset's price. However, Cowen points out that Bitcoin has historically experienced a pullback after the golden cross is observed.
Cowen emphasizes that while the golden cross does not guarantee a price decline, historical data suggests that Bitcoin tends to go down first after the occurrence of a golden cross. He refers to a previous golden cross in February, where Bitcoin's price dropped by approximately 8% to 9%. If a similar drop were to occur now, Bitcoin's price could reach around $31,000.
Cowen is closely monitoring whether Bitcoin can hold the $31,000 level as support if a correction occurs. He believes that this support level will be crucial in determining the future direction of Bitcoin's price. If the $31,000 level turns into support, it could indicate a potential continuation of the upward trend. However, if it fails to hold as support, Bitcoin's price may experience further decline.
While the golden cross is an important indicator to consider, it is essential to approach it with caution. Past performance does not guarantee future results, and Bitcoin's price movement is influenced by various factors. Investors and traders should conduct their own research and analysis before making any investment decisions. As Bitcoin continues to evolve, monitoring key indicators like the golden cross can provide valuable insights into its price trends.