Three factors that point why Bitcoin won’t rise despite BTCUSD forming a Golden Cross

Bitcoin just formed a Golden Cross. The last time it created a Golden Cross was on February 18, and people expected BTCUSD to skyrocket. Bitcoin, however, fell below $4,800!

Bitcoin is on a steady rise post the halving. It entered the consolidation phase at times. But the lackluster Dow Jones and S&P 500 caused a paradigm shift for the retail traders as they jumped into investing in BTCUSD.

A closer look at the BTCUSD charts would reveal that although Bitcoin prices increased post-May 12, there has been no significant trading volumes. 

 

Bitcoin’s Golden Cross formation is not very encouraging

A Golden Cross is formed when the short term moving average, such as the 50-DMA, crosses over the long-term moving average, such as the 200-DMA. It is perceived to be a bullish pattern.

However, a lot of times, investors forget that the Golden Cross is not a confirmed bullish pattern. Moreover, the Golden Cross needs to happen when the formation occurs with a large traded volume, thereby falling to the trap.

 

Factors as to why BTCUSD is deemed to fall

Source: TradingView.com

  1. The daily-chart for BTCUSD shows the Golden Cross formation. We need to take a look at the trading activity. The volume only rose once people realized a Golden Cross was forming. The MACD indicator is still neutral.
  2. The size of the candles is a notable cause of concern. Although BTC is on the rise, the green candles are tiny compared to the large red candles. It is indicative of the fact that BTCUSD is not a bull market.
  3. Moreover, the daily-price chart for BTCUSD clearly shows the formation of a Golden Cross on February 18, and a Death Cross on March 25. And it is imperative to note that both these patterns failed to predict Bitcoin’s move. After February 18, BTCUSD started dropping, and after the Death Cross on March 25, Bitcoin is steadily rising.

Therefore, the mad rush towards BTCUSD might be disastrous, and investors should bear this in mind before investing in Bitcoin.

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