Although historically the golden cross has been associated with significant price increases, it is not a reliable standalone indicator.
Meme cryptocurrencies may soon heat up, led by Dogecoin, which has formed a golden cross, suggesting significant price increases in the future.
A golden cross occurs when the 50-day simple moving average (SMA) of an asset's price crosses above the 200-day SMA. The golden cross indicates that short-term momentum is currently outperforming the long-term trend and may evolve into a strong bull market.
Dogecoin's moving averages showed a bullish crossover this morning. While the golden cross is viewed as a positive indicator, its performance in predicting trends in most markets (including stocks, Bitcoin, and Dogecoin) has been inconsistent. This makes it unreliable as a standalone indicator.
That said, Dogecoin's previous significant volatility mostly unfolded after the golden cross appeared. For instance, after the golden cross on November 6, 2024, the price surged over 130% in four weeks to 46 cents. After the moving average crossover turned bullish on November 22, 2023, the price soared by 25% in four weeks.
Similarly, a golden cross appeared in early November 2020, marking the start of a major four-month bull market, with prices rising over 1,000% in four months.
Let's see if history will repeat itself.
