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Bitcoin’s Impending Golden Cross May Bolster Bulls: Analysts

A widely tracked bitcoin price indicator is about to turn bullish – potentially accelerating the recent uptrend of the top cryptocurrency by market value.

The 50-day moving average (MA) of bitcoin’s price looks set to cross above the 200-day MA within two to three days. The resulting “golden crossover,” a long-term bull market indicator, would be the first since Feb. 18 and only the seventh in bitcoin’s lifetime, as per CoinDesk’s Bitcoin Price Index. 

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Daily chart (2020)

“The golden crossover will catch the attention of classical trend followers,” said Su Zhu, CEO of Three Arrows Capital. 

Trend-following traders do not predict or forecast specific levels, but simply join the trend (bullish or bearish), when they feel that a strong directional bias has been established. They often employ moving average crossover strategies to decide whether a trend is developing. This is because averages, which are based on past data, crowd out the noise created by intraday fluctuations and paint a better picture of the broader trend. 

When a short-term MA moves above a long-term MA, a bullish cross is confirmed. That is considered a buy signal by trend followers. Alternatively, a bear cross is taken as a sell signal. 

Thus, the impending golden cross, once confirmed, could bring in additional buying pressure from traders who employ MA strategies, leading to stronger price gains.

“I think MA strategies often work because they are self-reinforcing,” said Anthony Vince, head of trading at GSR. That viewpoint has logic as averages follow price and produce a bull cross following notable price gains. Once the cross is confirmed, more buyers join the market, potentially pushing prices higher. 

Lennard Neo, lead analyst at Stack, also expects the upcoming golden cross to bode well for the cryptocurrency. “Moving averages tend to be one of the best performing strategies when applied to crypto, at least for the past couple of years. We expect the same to happen in this potential golden cross, as BTC should see some upward price pressure,” said Neo. 

2019-and-2015

Indeed, the golden cross that took place last April yielded more than 130% returns over just a 64-day period. Meanwhile, the golden cross witnessed in October 2015 was followed by a quickfire 64% rally in just eight days. 

Some observers, however, are of the opinion that moving average crossovers are lagging indicators and often trap investors on the wrong side of the market. After all, MA studies are based on past data and tend to lag prices. 

In the past, there have been instances where the golden crossover turned out to be a bull trap.

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Daily chart (2020)

“The last golden cross was confirmed before black Thursday and the last death cross was confirmed before the April rally,” said Darius Sit, co-founder and managing director at Singapore-based QCP Capital. 

“The July 2014 cross for instance, yielded -23% returns from cross up to cross down,” crypto research firm Digital Assets Data told CoinDesk. 

So, if history is a guide, golden crossover is an unreliable indicator of price trends. 

Different this time?

What makes the upcoming golden cross different from some previous ones is the fact that it is supported by bullish fundamental developments. 

The rewards per block mined on bitcoin’s block chain were cut to 6.25 BTC from 12.50 BTC last Monday. Most  analysts expect the supply cut to put bitcoin into a long-term bull market, similar to the one seen in the months following the second reward halving, which took place in July 2016. 

Additionally, the challenging macro environment brought on by the coronavirus outbreak and the unprecedented monetary stimulus launched by major central banks is expected to boost haven demand for bitcoin. 

Hence, some analysts see a low probability of the upcoming bull cross turning out to be a bull trap. “Fundamentals and technicals are lining up well for the markets now, “ said Zhu. 

Meanwhile, Neo said that “the fundamentals of bitcoin remain strong, which contemplates every reason for a break upside.”

The on-chain activity does show a strong holding sentiment in the investor community. “The number of bitcoins held on exchanges has been steadily decreasing since the crash in March, and is now approaching a one-year low. This is the largest and most prolonged BTC exchange balance downtrend in Bitcoin’s history,” Glassnode, a blockchain intelligence firm, noted in its weekly report

Investors typically move bitcoins from their wallets to exchanges when they expect prices to drop. On the other hand, coins held on exchanges are withdrawn when the cryptocurrency is expected to see a sustainable price rise. 

At press time, bitcoin is changing hands near $9,800, representing a 0.6% gain on the day. The cryptocurrency found bids below $9,500 early on Tuesday, but is yet to cross above $10,000. The area around that level has proved a tough nut to crack over the past few days. 

With both fundamentals and technicals biased bullish, a move above $10,000 may happen soon. “A successful break higher and the next significant level overhead would be the 61.8% Absolute Fib at $12,160 area,” said Eddie Tofpik, head of technical analysis and senior markets analyst at London-based ADM Investor Services International Ltd.

However, over the past few days, the buyers have consistently struggled to keep gains above $9,840, as seen on the daily line chart. “Another failure there could see the forming of a possible double top and contemplation of the $6,000 area,” said Tofpik.

Disclosure: The author holds no cryptocurrency at the time of writing.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Schiff Shot Himself in the Foot as New Docs Bust ‘Trump-Russia Collusion’ Delusion, Analysts Say

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The newly released House Intelligence Committee transcripts have dealt yet another blow to the Trump-Russia collusion narrative, international political observers say, suggesting that the recent disclosure and forthcoming publications will help establish that there was no Russian meddling in the 2016 US elections whatsoever.

On 7 May, the House Intelligence Committee released 57 transcripts of interviews held between 2017 and 2018 as part of the Russia investigation.

However, the publication does not appear to have played out in the way the committee’s chairman, Adam Schiff, planned in March 2018. At the time, he lambasted the Republicans for their attempts “to protect the president” and vowed to release “the entire body of witness transcripts” “so the public can see the facts for themselves”.

The first thing the public learned on Thursday – when the transcripts were finally released – was that former Director of National Intelligence James Clapper, a long-time proponent of the Russia-Trump collusion narrative, “never saw any direct empirical evidence that the Trump campaign or someone in it was plotting [or] conspiring with the Russians to meddle with the election”. Nevertheless, being on air in April 2019, Clapper still insisted that there may have been some “passive collusion” between Trump and Russia, despite Special Counsel Robert Mueller finding nothing of the kind.

‘Russiagate Campaign is in Shreds Now’

“Schiff seems to have shot himself in the foot here”, deems Tony Kevin, former Australian ambassador to Poland and Cambodia. “While it will take time to sift through the thousands of pages, some of the juicier quotes have already made their way to the public and aroused comment”.

The disclosure occurred on the same day when the Department of Justice dropped the charges against the former national security adviser to Donald Trump, Michael Flynn, who fell victim to an FBI perjury trap, as his defence stated, judging from the bureau’s newly dumped internal files. The FBI notes clearly said that the agency had found no derogatory information about Flynn’s ties with Russia.

​These two important positive developments have dealt a heavy blow to the Russia collusion narrative and “the Russiagate campaign in Washington is in shreds now”, according to the former diplomat.

“The American obsession with Russiagate raged for over three years, bedevilling and weakening the entire Trump presidency: although the publication of the Mueller Report in April 2019 took some of the wind out of the Russia-haters’ sails”, Kevin highlights.

The former Australian ambassador points out that “in addition to Clapper, the transcripts include interviews with Obama administration advisers Ben Rhodes, Susan Rice, and Samantha Power; former attorneys general Loretta Lynch, among others”.

​”Rhodes, Rice, Power and Lynch likewise all admitted they hadn’t seen any specific evidence of ‘collusion’ between Trump and Russia”, he stresses.

He expresses hope that this development will pave the way to a general understanding in the US that there was no Russian interference in the 2016 US elections whatsoever: “Julian Assange has always denied that Russia gave him the emails, and so separately has the Russian government, and so separately has former British ambassador and noted contrarian commentator Craig Murray who claims inside knowledge of what really happened”, he recollects.

“Overall the signs are propitious for the US perhaps beginning to move on from its misguided and disastrous Russophobic obsessions of the past three years”, he presumes.

‘It Would Help Establish There Was No Meddling of Russia’

The content of the released transcripts have not caught anyone by surprise, as “we knew since the Mueller report published one year ago, and since the beginning of the case for the unbiased observers, that there was no conspiracy between the Trump team and Russia in the 2016 electoral campaign”, admits Guy Mettan, Swiss politician, executive director of the Geneva Press Club, and author of “Creating Russophobia: From the Great Religious Schism to Anti-Putin Hysteria”.

“It would help to establish there was no meddling of Russia in this campaign at all”, the politician stresses. “The whole case is a scheme set up in order to artificially maintain the political tensions with Russia… So we could hope that this publication should pave the path to the truth, which is important for people who are struggling for more truth and impartiality in the international relations”.

Perhaps, the unfolding situation “could help make the journalists and the Western  media community a little bit more careful in the treatment of future similar cases of disinformation”, Mettan envisions in an apparent reference to the aggressive “Russia collusion” media campaign launched by the US mainstream press from day one of Donald Trump’s presidency.

“But I’m rather pessimistic”, he adds. “As we can see nowadays with the coronavirus pandemic and the attacks against China, the same patterns are used in this new game. Only the target has been changed”.

‘More Documents Will be Forthcoming’

The newly-released transcripts are only the prelude to forthcoming revelations, says Larry Johnson, retired CIA intelligence officer and State Department official.

“The document release confirms what President Trump has said all along — the claim that he and his campaign worked with Russia or that Russia was meddling to swing the election to Trump is a lie”, the CIA veteran underscores.

Earlier, along with other Veteran Intelligence Professionals for Sanity (VIPS), Johnson concluded that the infamous “hack” of the DNC server, blamed by the Democrats on “Russian hackers”, never happened since it was most likely an inside job. He also subjected to scrutiny the conclusions of the DNC’s private cyber-security contractor “CrowdStrike”, which attributed the alleged “hack” to the Russians.

“More documents will be forthcoming and are likely to expose the key role that former President Barack Obama played in helping launch this attack on Donald Trump. The sworn testimony in these documents completely destroys the desperate Democrat narrative of Russian Collusion”, the intelligence professional underscores.

The views and opinions expressed in the article do not necessarily reflect those of Sputnik.



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