The 50-day moving average of Bitcoin’s price has started to rise again, and it could soon surpass the 200-day moving average, thus forming the so-called Golden Cross.
Although the advent of a Golden Cross does not have direct effects on prices, it is an indicator that many keep an eye on, and this could make the current sentiment even more positive.
Golden Cross of the Bitcoin price coming
The so-called Golden Cross is precisely the upward crossing of the 50-day moving average (2 and a half months) with the 200-day moving average (10 months).
It is an indicator observed as a potential signal of the beginning of a new long-term bull trend.
As an indicator, however, it has a couple of limitations.
The first is that it is a signal commonly considered very crude, and therefore not particularly indicative.
The second is that it tends to signal the beginning of a bull phase with a bit of delay.
The only real impact it has is on sentiment, as it is a simple indicator that tends to have appeal especially among retail.
The Death Cross of the Bitcoin price in August
In mid-August, a Death Cross occurred, which is the exact opposite of a Golden Cross.
At the time, the 50-day moving average had fallen below $61,700, while the 200-day moving average had risen above that threshold. This situation, with the 50-day moving average lower than the 200-day moving average, is still ongoing.
However, starting from the second half of September, the first began to rise decisively, while the second slowly started to fall.
In the current state of affairs, the 50-day moving average of the price of Bitcoin has risen to almost $62,300, after having dropped to $59,200, while the 200-day moving average has fallen to $63,300.
At this rate, within about a week, the overtaking could occur, that is, the recording of a Golden Cross.
The bullish phase of Bitcoin’s price: Golden Cross and the beginning of the bull run
In reality, from other indicators, it has already emerged that a bull phase should have started on the price of Bitcoin.
In particular, the candle of October 14, with a jump from $62,800 to $66,500, clearly signaled that the previous descending lateralization phase, which began even at the beginning of August, a few days before the Death Cross, could have ended.
However, after climbing up to $69,500, the price of Bitcoin on Monday halted its run.
At this moment, it is as if the bull trend of BTC has the handbrake on, ready to start but without momentum.
The reason seems to be linked to the strengthening of the US dollar, something that often happens before the US presidential elections.
The strength of the dollar
From September 30 to today, the Dollar Index has risen from 100.4 points to the current 104.3.
It may not seem like much, but for an index like this, it is instead a significant and above all quick rise.
According to some analysts, it could furthermore rise again and move above 104.5 points, then start to slow down in view of the presidential elections on November 5, and subsequently begin to fall.
The price of Bitcoin tends to be inversely correlated to the Dollar Index, especially in the medium/long term, and so as long as the dollar strengthens quickly, BTC cannot rise.
The point, however, is that many expect the dollar to eventually weaken after the elections, something that has happened very often in the past. Furthermore, before it starts to fall, it might simply slow its rise and perhaps at some point stop, and this could release the handbrake on Bitcoin.
The key price levels of BTC
At this moment, the key level for the price of Bitcoin is $67,000.
If the dollar were to continue to strengthen significantly, there is a risk of a drop to 65,000$, as well as even below 63,000$.
However, the danger threshold seems to be the $60,000 reached on October 10.
If, on the other hand, the rise of the Dollar Index should start to slow down, and then stop, there could be a rise not only to the $70,000 brushed on Sunday, but also to that $72,000 which, since April, has constituted a ceiling beyond which it has been impossible to return solidly.
In the event that a true rally begins, or even a bullrun, the other levels to watch would be the $73,800 from March, which still constitutes the all-time high today, but also $75,000 and for some even $80,000.
The Bitcoin spot ETFs
An important role this time could be played by the spot BTC ETFs in the USA, never present before during the presidential elections.
The fact is that from October 11 to 21, there were seven consecutive bull sessions with strong daily capital inflows into these ETFs.
Instead, yesterday there was an outflow.
It almost seems like there was a bit too much enthusiasm for the possible start of the typical end-of-October rally (or uptober), or even a bull run, so much so that people forgot that in the weeks leading up to the US presidential elections, the dollar tends to strengthen.
All this, however, seems to be on the verge of changing, as there are now less than two weeks until the election of the new president of the United States of America.
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