Bitcoin’s current “golden cross” pattern was previously seen when the currency’s value soared twice in 2020.
The cryptocurrency market has been soaring recently, and one cryptocurrency in particular — Bitcoin (BTC) — is leading the charge. After suffering through a period of severe volatility for the larger part of the last 60 days, the flagship cryptocurrency has shown signs of recovery, even breaking through its 200-day moving average earlier this month, implying that a move to the $50,000 psychological barrier is imminent.
To put things in perspective, BTC has gained more than 55 percent in the previous month alone, helping to push the overall market capitalization of this still-developing area back above the $2 trillion level. These astounding results can be attributed in large part to the recent growth in institutional usage in this area.
In this sense, Michael Saylor’s Microstrategy, EV manufacturer Tesla, and crypto-focused investment firms Galaxy Digital Holdings and Voyager Digital are among Bitcoin’s most important institutional backers. Moreover, a number of traditional banking institutions have recently entered the crypto fight. Wells Fargo, one of the country’s oldest banks, is the newest addition to a growing list of financial institutions offering rich clients indirect access to Bitcoin.
JPMorgan, BNY Mellon, Morgan Stanley, Bank of America, and Goldman Sachs are among the many notable financial organizations that offer a variety of crypto-focused financial solutions.
Finally, according to recent SEC filings, a growing number of wealth management firms, including Illinois-based Clear Perspective Advisors and Ohio-based Ancora Advisors, have been buying large amounts of Grayscale’s Bitcoin Investment Trust (GBTC) shares, indicating a growing demand for the asset among institutional investors.
What to expect?
Iqbal Gandham, VP of Transactions for security and infrastructure solutions provider Ledger, told Cointelegraph that when big price milestones are crossed, there is usually a delay — much like the one we are seeing now — so that the market can stabilize:
“The longer we hold it here the more support it will gather. As for factors that will drive this run, I really feel it’s more psychological rather than news-driven. People are just waiting for a trend, so any slightly positive news could cause the price to move dramatically. It’s not a matter of if anymore, just a when.”
Daniele Bernardi, CEO of fintech management company Diaman Group, told Cointelegraph that his company’s proprietary indicators are all extremely positive regarding BTC’s near-term growth. In his personal view, however, the next wave of bullish market growth will not purely be driven by Bitcoin, but rather by alt-assets such as Ether (ETH), Cordano (ADA) and Binance Coin (BNB).
“My point of view is that it is actually more important to focus on altcoins for a while. We can expect a reduction of Bitcoin dominance for some months,” he said.
Lastly, according to Talal Tabbaa, chairman and co-founder of CoinMENA — an FTX-backed Middle East-based cryptocurrency exchange — even though Bitcoin could be trading at $50,000 in the coming few days, such short-term price action is quite irrelevant when looking at the grand scheme of things:
“Technical analysis has limitations and shouldn’t be solely used for decision making. I actually think it crazy that some people think they can draw lines on a chart and predict the future. Macro events like China banning mining or the US hopefully approving ETFs will have much bigger impacts on Bitcoin’s short term movements than any technical analysis.”
Bitcoin “gold cross” spotted suggesting solid near-term price action
Despite the fact that there has been some doubt about where the crypto sector is headed in recent months, there is enough data to suggest that the market is poised for another bull run in the near term. A “golden cross” pattern — between the 30-day and 60-day moving averages of Bitcoin’s hash ribbon — was recently noticed, according to blockchain analytics company Glassnode.
When the short-term average value of an asset rises above its long-term average value, a golden cross is formed. The comparison of BTC’s 30- and 60-day hash ribbons, as seen in the chart above, reveals that trading volumes are on the rise once more. It’s also worth noting that the similar pattern appeared before Bitcoin rose in January 2019 and 2020, as well as in March and December 2020.
Finally, the hash rate recorded by Glassnode shows that miners who were forced to relocate their operations from China due to recent regulatory tightening may have finally found a new home overseas. In this line, it’s worth noting that five North American mining companies — Marathon Digital, Riot Blockchain, Bitfarm, Argo Blockchain, and Hut8 — claimed a 58 percent rise in operating output just over a fortnight ago.
Other factors affecting BTC’s price action
Elon Musk has changed his mind on Bitcoin after slamming it earlier this year for its negative environmental impact, giving investors — who listen to the Dogefather’s every word — even more reason to be positive on the cryptocurrency. Not only that, but Twitter CEO Jack Dorsey and Cathie Wood of Ark Invest have announced their long-term commitment in the leading cryptocurrency.
A spokeswoman for cryptocurrency exchange Bitstamp informed Cointelegraph that the number of active retail female investors has increased by more than 24 percent in the previous six months, indicating that BTC is becoming more popular.
“The share of the trading volume generated by female investors at Bitstamp has increased by an astonishing 58% in that same time, pointing to a surge of new investors interested in cryptocurrencies.”
Lastly, with a growing list of countries — most prominently El Salvador — starting to adopt varied measures to recognize and regulate the crypto market, it will be interesting to see how the coming few days play out for Bitcoin, especially with the prevailing market sentiment that seems to be overwhelmingly positive at the moment.