Traders commonly use the term “death cross” especially in crypto trading to confirm whether a trend is about to be bearish but on the opposite side of the spectrum is a “golden cross” to confirm that a bullish trend is brewing. Bitcoin is currently forming a golden cross, suggesting that the market is about to experience some upside and this reflects its current performance.

A golden cross occurs when the 200-day moving average indicator crosses the 50-day moving average indicator from below. It is called a golden cross because it often highlights strong bullishness in the market and it has traditionally been used to confirm the return of bullishness in BTC’s price action.

Source: Binance

Bitcoin is currently trading at $47,614 after rallying by 3.54% in the last 24 hours and its 7-day performance is up by 2.25%. A substantial price gain in the last 24 hours, which aligns with the golden cross, indicating the likelihood that there might be some more upside in the next few days. Interestingly, the golden cross is happening after a substantial price dip that took place last week, which means a recovery might send the price rallying back above $50,000.

The current rally is also taking place after the recent dip sent BTC into the oversold zone in the last few days according to the RSI indicator.  Meanwhile, BTC has registered a significant increase in buying volume in the last few hours, reflecting the bullish sentiment supported by the golden cross. Many traders have been anticipating the golden cross as a sign of the bulls regaining their momentum.

The golden cross is not the only bullish news today. Fidelity Investments has reportedly encouraged the U.S Securities and Exchange Commission (SEC) to approve Bitcoin ETFs that will be backed by actual BTC. Although the SEC is yet to confirm whether it will approve or not, approval of actual BTC-backed ETFs might have a massive positive impact on the price of Bitcoin especially because it will lead to more demand for the Bitcoin necessary to back those ETFs.

Meanwhile, Bloomberg Crypto recently revealed that Microstrategy, one of the biggest cryptocurrency investment companies currently holds more value in Bitcoin than some of the cash held by some of the top S&P 500 investment firms. The report highlights the magnitude of Microstrategy’s investment in BTC. Such a major investment shows just how attractive BTC is to institutions, and Fidelity Investment’s push for Bitcoin ETFs reflects strong institutional demand.

Summary

The golden cross is just one of the many signs that underscore strong upside potential for Bitcoin and BTC will likely register a strong rally in the next few weeks. The expectations will be backed by strong demand but investors should also exercise caution due to potential black swan events ahead. For example, the U.S Senate attempted to pass regulations that would hurt the crypto market through the Infrastructure bill before they went for recess.

The Senate will soon resume, which means another potential regulatory shake-up. Bitcoin will still be attractive even if it experiences another crash. If that happens, then it will be a good opportunity for more dollar-cost averaging.