Whether it is a cryptocurrency or a traditional asset, understanding short-term and long-term moving averages (MAs) is important for trading strategies.
When the short-term and long-term moving averages cross, traders will find two rare but powerful signals:
Gold cross : Bullish market
Death cross : Bearish market
Gold and death cross predicted the worst economic recession in the last century, for example, Death cross predicted the bear markets in 1929, 1938, 1974 and 2008.
Importantly, they highlight the potential of a major trend that enables investors to ease their minds in the chaos of Bitcoin’s extreme intraday and daily price volatility.
Gold crossing
When a short-term moving average crosses the long-term moving average and goes upward, a gold crossing will occur, which sends a signal to traders: that is, it indicates that the asset price will show a strong bullish trend.
gold crossing has two main requirements:
First: ends the sharp downward trend due to the weakness of the seller, which means that the downward pressure on the seller in the market has been reduced;
Second: the short-term moving average is higher than the long-term moving average, usually the 50-term moving average and the 100-term moving average.
As shown in the green section on the chart, a golden cross appeared on the daily chart of March BTC, indicating a strong rise from the low of $3,122 set on December 15, 2018.
has risen 260% from March 12, up from $3,859 to nearly $14,000 on June 26.
Compared with monthly, weekly, and daily charts, the golden cross is best suited to analyzing long-term frames.
Death Cross
On the contrary, the death cross is caused by the exhaustion of long-term buyers and the short-term moving average of assets below the long-term moving average (usually the 50-term moving average and 200-term moving average)
On March 30, 2018, when the 50-day moving average fell below the 200-day moving average, BTC showed a large bearish market, indicating that its price fell from $6,850 to the bottom of $3,122 on December 15, a drop of 54%.
is like the golden cross, and the death cross is best determined by a longer time frame, as this trend will need to be confirmed the next day.
Gold crosses and death crosses are not always perfect, but identifying and utilizing gold and death crosses and other indicators is "priceless" for investors, helping investors become ease in the world's most volatile asset class trading.
