Weekly Golden Cross - Take 2

2023年5月25日

#BTCLIVE

With the Asia session dumps over the last 48 hours wiping out all gains made since mid march we thought we'd zoom out and look at the bullish long term technical case for BTC.

The weekly moving averages will be key over the next few weeks in giving us long term direction.

Since early Jan the 20 week MA has been in uptrend, on the 13th March the 50 week is showing an uptrend and the 200 week is starting to show a positive direction.

Key to maintaining and confirming these uptrends will be having price bounce and remain above the MA's.

You can see the 20 and 50 MA are converging and price has already been supported by the MA's. If the bounce from support is complete and we get some higher closes in price the 20MA will cross back above the 50MA completing a 'Golden Cross'.

The mention of this will probably get a few eyes rolling as it became a common and often extremely underwhelming crypto pump talking point however that was usually in reference to the daily chart.

Here on the weekly the last time the 20MA crossed the 50MA was back in April 2020 and preceded a parabolic run up in price.

Now back in April 2020 there were some other things going on that may have also influenced this, the whole world was grinding to a halt and governments were printing money and just handing it to the housebound public. This may have had a slightly larger impact than the MA crossing and the price run may therefore have been more driven by the macro but there are some also some macro similarities between these two moments in history.

In 2020 covid instantly caused an economic collapse the responses to that collapse have now, 3 years later, created a secondary slow collapse with inflation and interest rates crippling consumers and most major economies slipping into recession.

The key difference though is the governmental response. In 2020 we had quantitive easing, in 2023 we have quantitive tightening. Money printing then, money withdrawal now.

Whilst a FED pivot to quantitive easing is looking further and further away there are signs of easing within a Chinese economy which is seemingly opening the doors to BTC.

Following an injection of 92bn from the Peoples bank of China in feb, the Chinese government softened its stance on crypto trading in Hong Kong.

The 2023 weekly golden cross might therefore have a chance if the bullish technical can be matched with a major liquidity injection.

One last potential liquidity boosts for the golden cross might be from tether who are allocating around 75m from their profits to BTC.

Analysis from Coinshares estimates that money flows of $10-20m = price effect of 2.3%. Tether could therefore also help fulfil the golden cross scenario.