Coindesk News

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. 

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. 


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.

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.

Disclosure Read More

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.

Source link

News RT

Tyson Fury promises ‘massive, massive news’ as rumors of impending showdown with Anthony Joshua intensify (VIDEO) — RT Sport News

WBC heavyweight champion Tyson Fury has teased on social media that some “massive” news is soon to be released by his management company, sparking rumors that a title unification bout with Anthony Joshua is just around the corner.

Fury made his proclamation while speaking to fans on Instagram Live on Saturday, promising that there will be news, potentially related to his next fight, released very shortly.

Also on
‘Let’s get it on!’ Anthony Joshua issues official callout to Tyson Fury for undisputed heavyweight title fight (VIDEO)

This has fueled speculation that there had been a breakthrough in discussions between representatives of Fury and Anthony Joshua, and comes after reports that figures within Saudi Arabia had made a bid to host what would be the most high profile heavyweight title fight in a generation. 

We’ve got some massive news coming soon. Some massive, massive news,” Fury said.

I was just on the phone to the old MTK [his management company] and we’ve got some massive news coming for you all very, very soon, so keep an eye out for it all.

Fury had been expected to face Deontay Wilder in a trilogy bout this summer before the on-going coronavirus health crisis forced all parties to pull back. 

Wilder, who lost their second fight via seventh-round corner stoppage in February, had taken up his contractual option of arranging a third fight with Fury. However, there has been no indication about when boxing events may be considered safe to proceed.

Joshua’s promoter, Eddie Hearn, however, has said that there have been no discussions regarding arranging a fight between his fighter and Tyson Fury as of yet.

Top Rank’s Bob Arum, who promotes Fury in the United States, has hit out at sports entities attempting to stage events in the midst of the COVID-19 pandemic – and recently referred to UFC chief Dana White as a “cowboy” for pushing ahead with Saturday night’s controversial card in Jacksonville, Florida. 

Also on
‘Now you see how hard he hits?’ Incredible ringside footage shows Fury’s punching power as he decks Wilder (VIDEO)

Joshua has already signed a contract to fight Kubrat Pulev in a mandatory title defence, though this was also cancelled due to the pandemic. For Fury-Joshua to be fast-tracked, both Pulev and Wilder would have to agree to offers to step aside from their forthcoming fights. 

It remains to be seen if this is manageable, especially at a time when the sporting landscape remains so unclear, but it appears that there is at least one very rich consortium in Saudi Arabia who might be willing to try.

Source link