Bitcoin formed a historically bullish pattern when its 50-day moving average crossed above its 200-day moving average. According to an analyst from on-chain analytics firm Jarvis Labs, this pattern is known in the market as a golden cross and forecast price appreciation in the coming months.
Bitcoin’s last golden cross took place in 2021 and seems far in the rearview mirror for investors. At this time, the crypto was able to drive the bullish wave to new all-time highs (ATH).
510 days ago, in September 2021, Bitcoin saw a golden cross before hitting a low of $29,000. After that, The most prominent cryptocurrency in the market climbed to never explored territory in November 2021, surging 45% since that time.
In 2015, Bitcoin soared 6566% to an all-time high of $20,000. In April 2019, Bitcoin rose 154% and reached $14,000 when the price action saw a golden cross as it did today.
Furthermore, in 2021 Bitcoin surged 45% after the golden cross effect materialized and reached its latest and current all-time high of $69,000. But can Bitcoin confirm a new bullish macro?
The Bucking Bull
A recent newsletter from the Jarvis Labs team and its crew member under the pseudonym “JJ the Janitor” reviewed the macroeconomic environment and how the crypto market is positioned when the golden cross materializes on the Bitcoin charts. The analyst stated:
The “Golden Cross” can be thought of as the first blossoms of spring. It occurs when the 50-day moving average rises above the 200-day moving average. Every time this has happened to Bitcoin, it has confirmed that a new macro bullish trend is underway.
The 50-day ($19,820) has just surpassed the 200-day ($19,720), creating Bitcoin’s first “golden cross” since September 2021. The green line represents the 50-day Moving Average (MA), and the red line the 200-day MA.
According to Jarvis Labs, prices drop soon after each cross, causing a “brutal shake-out in the market” before it reaches new highs. This market shake-out allows the new trend to cement before the arrival of a “full-blown” bull market.
Before the bull run took over the market in September 2021, allowing the price of Bitcoin to reach the milestone of $69,000 from $48,000 (when the golden cross event occurred), BTC saw a minus -20% retracement sending it below $40,000.
The DXY Has Confluence With A New Bitcoin Bull Market
The U.S. Dollar Index (DXY) has been in a downtrend since Q4 2022. According to Jarvis Labs, since the dollar has an inverse correlation to crypto, the former’s downtrend could open the gates for an “early 2023 crypto rally.”
The DXY dropped 12% from its September 2022 high of 114.80 to 100,80. Meanwhile, Bitcoin climbed from the floor of $16,000 to over $24,000 by the end of January.
For Jarvis Labs, the DXY’s trend confluences with the idea of a crypto bull market. However, the nascent asset class could experience a “strong shake-out” before going full throttle.
In addition, the Jarvis Labs team has seen the return of large whale wallets, which signals big money has been accumulating since to start of 2023.
The analyst stated the following about the chart above and its potential bullish implication for Bitcoin:
This syncs with our “bucking bull” theory that there will be additional upside, but also more volatility in the time to come.
Bitcoin has dropped in the last 24 hours, down 4.1% since yesterday, and recorded a 7.4% retracement in the last seven days.
Featured image from Unsplash, charts from TradingView.