Over the past few days, all anyone could talk about on Crypto Twitter was the golden cross that had formed on Bitcoin’s one-day chart.
For those unaware, a traditional golden cross in technical analysis is when an asset’s 50-day simple moving average crosses above its 200-day moving average, suggesting that a decisive bull trend is forming. As Investopedia further explains on the subject matter:
“As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes. […] It is interpreted by analysts and traders as signaling a definitive upward turn in a market.”
So, unsurprisingly, when Bitcoin formed this auspicious sign at the start of the week, cryptocurrency investors across the board were over the moon, claiming that the next parabolic bull run that will take BTC to $100,000 and beyond was starting then and there.
Though this was quickly proven not to be the case. On Feb. 19, the cryptocurrency cratered from the $10,300 daily high to as low as $9,250 on some exchanges — a drop of just around 10 percent — in a matter of a few hours, liquidating hundreds of millions of dollars worth of leverage positions.
Despite this brutal crash that undoubtedly caught traders with their pants down, Bitcoin’s strong correction may actually be par for the course in a wider uptrend.
Bitcoin could be on verge of strong bull run, despite 10% crash
As aforementioned, Bitcoin, from its peak on Feb. 19, dropped just around 10 percent. This, of course, was shocking; the golden cross that formed just a day or two earlier was a sign to many investors that the days of BTC dropping hundreds of dollars in a day were long over.