Potential Pullback of Bitcoin: Will the Golden Cross Trigger a Correction?
BTC Golden Cross and Historical Cases Cowen emphasizes that Bitcoin is approaching a technical formation on the daily chart known as the 'Golden Cross,' where the 50-day moving average crosses above the 200-day moving average.
Although this indicator is generally viewed as a positive market signal, historically, Bitcoin's price has experienced short-term declines following such formations.
Cowen points out that various pullbacks have occurred after the Golden Cross in recent years. In this context, Cowen reminds us that Bitcoin experienced significant value losses during the Golden Cross periods in 2015, 2019, 2020, and 2021.
He notes that the decline in 2015 was a deeper pullback, and similar trends have emerged in recent years after this pullback formed.
Benjamin Cowen: 'When the Golden Cross occurs, we typically see a pullback. In 2019, 2020, and 2021, there were pullbacks after the Golden Cross. The pullback in 2015 was quite substantial.'
Potential Short-Term Trend for BTC This analyst believes that a pullback of 10% to 15% may occur after this formation. Therefore, the new Golden Cross could lead to double-digit short-term declines for investors.
Benjamin Cowen: 'By examining previous Golden Crosses, we generally observe declines of about 10-15%.' Cowen states that during this period, investors expect prices to rise sharply along with price surges, and short-term price forecasts are likely to increase significantly.
However, the pullbacks that occur will bring balance to the market and limit overly optimistic predictions. The pullbacks following the Golden Cross may temporarily quell market excitement.
Benjamin Cowen: 'After the Golden Cross, prices generally rise, and investors begin to expect higher prices. However, a pullback follows, and the market ultimately tends to balance out.'
