Story by: Wayne Duggan , Benzinga Staff Writer
After a brutal 2018 for cryptocurrency investors, bitcoin has bounced back with a vengeance so far in 2019. Bitcoin prices are up 36 percent year-to-date to above $5,000, and a bullish technical signal this week has bitcoin bears on notice.
Bitcoin generated a bullish golden cross in its chart on Tuesday when the 50-day simple moving average crossed above the 200-day SMA. The golden cross is a bullish technical signal that occurs when shorter term bullish momentum overcomes a more bearish or neutral longer-term trend.
Bitcoin’s golden cross is the first of its kind since 2015.
In addition to the golden cross, bitcoin traders were hoping for some continuation following a huge surge in bitcoin prices back on April 2 that took the cryptocurrency from $4,100 to $4,900 in a 24-hour period. Unfortunately, a sell-off on Thursday suggests consolidation may continue for bitcoin investors despite the golden cross. Some traders has even speculated that the golden cross could have been a catalysts for a short squeeze as bitcoin bears rush to exit their positions. So far, that squeeze hasn’t taken place .
Despite the initial disappointment following the golden cross, bitcoin traders have plenty of reasons to be bullish in the medium-term. The chart of the Grayscale Bitcoin Trust (Btc) GBTC 8.74% below highlights how the early April breakout finally broke the bearish resistance line that had been in place since December 2017.
Since that breakout, $7.50 has been the major resistance. The GBTC fund first struggled with resistance at $7.50 to $8 on the way down back in November and December of 2018. That same level has served as the trust’s 2019 highs after it failed to break above $7.50 twice so far this month.
In addition to the golden cross in the bitcoin chart, the GBTC trust is forming a bullish ascending triangle pattern since its April 2 breakout. The ascending triangle pattern typically results in a bullish breakout to new highs when the rising support line (around $6.40 at time of publication) eventually forces the stock above the resistance line (at $7.50).
For cryptocurrency traders wondering why bitcoin has been so strong in recent weeks, eToro analyst Mati Greenspan said Tuesday there’s no clear fundamental reason for the golden cross.
“Sure, there are a load of bullish signs right now… but if you’re asking what caused this morning’s movement, you might be slightly disappointed as there doesn’t seem to be any specific catalyst for this. It seems simply to be a shift in outlook,” Greenspan said.
Despite the bullish medium-term momentum, the price of bitcoin remains down 43.6 percent overall in the past year.by