The 50-week simple moving average (SMA) of Bitcoin (BTC) price has exceeded the 200-week SMA for the first time in history. Market participants call this a “golden cross” and see it as a positive change in asset prices, and this sign has finally appeared on the weekly price chart of Bitcoin (BTC).

According to some technical analysis textbooks, the phenomenon in which the short-term SMA falls below the long-term SMA is called a “death cross,” and the term is said to have originated in Japan.

Many traders view this crossover as a prescient indicator that a long-term bull market is coming.

However, bullish interpretations remain questionable, as averages are based on historical data and tend to lag prices. In other words, averages represent what has happened in the past, and this golden cross on the weekly chart is the result of Bitcoin’s over 70% rally to $42,700 in four months.

Seasoned traders consider crossovers to be lagging indicators, and they often actually coincide with trend expiration. For example, the weekly death cross identified in early 2023 signaled the bottom of the bear market. Also, the results shown by the golden cross and death cross on the Bitcoin daily chart are a mix of both bullish and bearish trends.

Bitcoin’s rally has already stalled, with 11 spot exchange-traded funds (ETFs) down 10% from a high of around $49,000 shortly after it began trading in the U.S. on January 11.

Observers say the bullish momentum has waned as early ETF flows did not meet market expectations.

“ETF capital flows have so far gotten off to a strong start with $965 million (approximately 140 billion yen, exchange rate: 1 dollar = 145 yen) including seed funds. Prices have fallen off the euphoria of ETF sales because expectations are high,” said Greg Cipolaro, global head of research at New York Digital Investment Group (NYDIG), a Bitcoin-focused investment firm. (Greg Cipolaro) said in his newsletter on the 16th.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: TradingView
｜Original text: Bitcoin Sees Its First Ever Weekly ‘Golden Cross’