Bitcoin Forming Bullish Breakout Pattern; First Time Since 2016, Indicating A Major Rally Potential
- Golden Cross is indicative of a bull market on the horizon
- Macro Outlook: Perfect storm for bitcoin is brewing
The market has turned green after seeing losses for the past few weeks. Bitcoin has jumped above $10,000 currently up 3.15% while trading at $10,800.
As we entered into August, Bitcoin price started pumping on the back of Fed cutting down the interest rate for the first time since 2008 recession and US going for round two of the trade war with China.
Given the way things are going, we might be in for an even bigger surge in the near future as Bitcoin is forming a bullish pattern called Golden Cross. The last time we formed this gold cross pattern was in 2016 when started our way to a new bull cycle that would take us to the all-time high at $20,000 in December 2017.
BULLISH: The 50MA crossed above the 200MA on the 3-day BTC/USD chart, forming a so-called golden cross. The last time this happened was in February 2016. pic.twitter.com/WplNLcuTmc
— Bitstamp (@Bitstamp) August 2, 2019
Golden Cross is indicative of a bull market on the horizon
The golden cross is a pattern which is a bullish signal in which a short-term moving average crosses above a long-term moving average.
The most commonly used moving averages in this bullish breakout pattern are the 50-period and the 200-period moving average. As long term indicators carry more weight, the golden cross gives an indication of a bull market on the horizon and is supported by high trading volumes.
A golden cross is a three-stage process. The first stage requires that a downtrend bottoms out followed by the second stage where shorter moving average forms a crossover up through the larger one to trigger a breakout. This gives the confirmation of a trend reversal. The last stage is continuing upturned.
The golden cross is a technical chart pattern that gives an indication of the potential for a major rally. It can be contrasted with a death cross that indicates a bearish price movement.
Macro Outlook: Perfect Storm for Bitcoin is Brewing
In the short term, we would be seeing a lot of ups and downs but the macro outlook for Bitcoin is extremely bullish.
According to Delphi Digital’s latest report, Bitcoin’s narrative is shifting towards “digital gold,” driven by the growing risk of currency devaluation and rising geopolitical tension because of trade wars.
0/ The Perfect Storm for Bitcoin is Brewing.
Our team just released our Quarterly Macro Outlook, which digs deep into the key drivers behind Bitcoin’s long-term value proposition as a non-sovereign, digitally native store of value. Quick summary thread: https://t.co/cBcvmbcNkr
— Delphi Digital (@Delphi_Digital) August 3, 2019
Meanwhile, global banks are in a race to cut interest rates amidst the backdrop of inflation and slowing economic activity. This week we saw the Federal Reserve cutting down interest rate by 25 bps.
As per Delphi Digital's in-house macro strategist, the risk of recession in the US is rising fast. As for how Bitcoin will perform during that time, for which BTC lack historical precedent, the firm focuses on the gold performance that surged in value.
Moreover, the shift in sentiment for global banks is fueling a rally in risky stocks such as stocks. Bitcoin, meanwhile, is one of the best performing asset globally YTD.
“We believe BTC will benefit from secular + cyclical trends in the coming years.”
Bitcoin’s price is $40,039.78 BTC/USD exchange rate today. The real-time BTC market cap of $750.17 Billion currently ranks #1 with a chart dominance at 62.37%, daily trading volume of $30.44 Billion and live coin value change of BTC 1.95 in the last 24 hours.