Bitcoin Enters Bullish Territory as Golden Cross Takes Shape

Bitcoin’s daily chart has officially entered golden-cross territory, giving traders a bullish technical signal that could point to a stronger long-term trend.

The formation occurs when the 50-day simple moving average rises above the 200-day moving average. This setup is widely regarded as an indication that recent price momentum is overtaking the longer-term trend and may create room for further gains.

Despite its bullish reputation, the golden cross has delivered inconsistent results for Bitcoin. The cryptocurrency has recorded 12 such formations historically, but only three remained in place for a full year. Those three instances produced an average 12-month gain of roughly 250%.

The other nine occurrences for which three-month data was available generated an average return of just 24.9%.

Bitcoin’s latest golden cross therefore does not guarantee that a prolonged rally is about to begin. Historical performance shows the indicator has produced premature bull traps around three times more frequently than it has preceded sustained multi-year rallies.

Still, the crossover gives bulls another technical factor to monitor as Bitcoin attempts to extend its recent momentum.

Bitcoin was trading at around $78,650 at the time of writing, down 0.6% since midnight UTC, according to CoinDesk data.