In a video update released on May 31, 2023, James Mullarney, the host of the popular YouTube channel “InvestAnswers,” suggested that Bitcoin’s price could skyrocket in the coming months if two crucial indicators intersect. The analyst, who shared his views with his over 444K YouTube subscribers, pointed out that a potential ‘golden cross’ could trigger a significant uptrend for Bitcoin.
In the world of technical analysis, moving averages are used to smooth out price data by creating a constantly updated average price. The 50-week moving average is a line that plots the average price of Bitcoin over the previous 50 weeks, while the 200-week moving average does the same over a longer period, i.e., the previous 200 weeks. These averages help traders to identify potential buying and selling opportunities by comparing the current price of an asset with its average price over a certain period.
A ‘golden cross’ is a bullish signal that occurs when a short-term moving average, such as the 50-week moving average, crosses above a long-term moving average like the 200-week moving average. This event is often seen as the start of a sustained uptrend and is the opposite of a ‘death cross,’ which signals a potential bearish market.
On the other hand, a death cross occurs when the short-term moving average crosses below the long-term moving average. This is typically seen as a bearish signal that could indicate a significant downturn in the market. However, the analyst pointed out that such crosses do not necessarily lead to prolonged downturns.
The analyst predicts that this golden cross will occur sometime in August. He explained that while Bitcoin has come close to this event in late 2015, it has never actually crossed the 200-week moving average with the 50-week moving average.
The analyst further stated that around 65% to 70% of the time, when a golden cross occurs, i.e., when the short-term line crosses the longer-term line, the market tends to go ‘bonkers.’ This suggests a significant price surge for Bitcoin. He also noted that August, typically a quiet time in the market due to low volume, could see increased activity due to this potential catalyst.