Bitcoin’s recent golden cross on the daily chart may have driven bullish enthusiasm for the leading crypto to reach a tipping point. With the upcoming halving, many investors are buying up sub 10K BTC in preparation of the supply-side shock.
Golden cross has traders seeing visions of green candles
After May, when Bitcoin’s upcoming halving takes place, the leading cryptocurrency will have an inflation rate of 1.8%, less than that of gold and US Dollars. This will only increase the asset’s store of value narrative, as it truly becomes a better store of value than any other safe haven asset.
The halving is when miners receive half the scheduled block reward they currently receive for validating transactions in the Bitcoin network. Halvings were designed by Satoshi to create scarcity of existing Bitcoin supply to increase price, bootstrap new users, and create a positive feedback loop increasing Bitcoin adoption. They take place every 210,000 blocks, or roughly 4 years.
Right before the last halving, we saw a similar golden cross chart formation on the BTC/USD chart, which led to a 218% increase in price as Bitcoin rose to its all time high. Traders have not forgotten this lesson, and seem to be positioning themselves in anticipation.
As of writing Bitcoin is trading at $10,0021, after dipping as low as $9,480 over the weekend. As the golden cross confirmed on the chart today, we saw volume for longs increase driving price back above the psychologically important $10,000 price level.
Bitcoin still may not be in a full-fledged bull market, but investor sentiment is currently pushing the pendulum in that direction. We may see a bullish run up coming into the halving, then see a retracement either immediately before or after the event.