- Bitcoin returns to the low $9,000s after failing to clear resistance around $10,000
- Golden crossover, which is considered to be a bullish technical indicator, occurred two days ago
- If buyers fail to keep the price action above $9,000, we may see a quick trip towards $8,200
Bitcoin has fallen for the second day in a row after the price failed to move past the $10,000 resistance again. The buyers expect to receive a boost from the golden crossover, which took place yesterday, in pushing the price action higher in the coming weeks.
Fundamental analysis: Golden crossover takes place
Just a few days after the halving event, the crypto community found another reason to expect a rally in Bitcoin prices – the golden crossover. This widely-tracked technical indicator takes place when the 50-DMA moves above the 200-DMA. The opposite of the golden crossover is the “death crossover”, which takes place when the 50-DMA falls below the 200-DMA.
As a moving average that is based on the lower number (50), it tends to move around more quickly than the “fatter” versions, like the 200 moving average. For instance, for the latter to change its trend direction, the price action needs to make continuous lows/highs for a few weeks at least.
Historically, the golden crossover proved to be supportive of the Bitcoin price. In the last five years, on two out of three occasions Bitcoin price gained in the weeks that followed the golden crossover.
Separately, it seems that a number of blocks of coins have been moved around. This wouldn’t attract so much attention if those blocks were not mined in 2009, and may possibly be tied to Satoshi Nakamoto.
This has led to speculations that this change of hands led to a price dipping on Wednesday and Thursday, although there is no direct connection to Satoshi. Another theory concerning the fall in Bitcoin prices blames the halving event that took place two weeks ago.
Technical analysis: Bitcoin price struggling to stay above $9,000
As you can see on the chart, the golden crossover occurred two days ago when the 50-DMA (the blue line) moved above the 200-DMA (the red line). In February, the price action had surged 5% higher on the day the crossover took place.
The price action has now returned to retest the broken descending trend line and the horizontal support (the former resistance) near the $9,000 mark. If this support holds, we may see another run at $10,000 in the coming days.
If broken, the price action is likely to push lower and test the confluence of two moving averages, near $8,200, offering a chance to buy Bitcoin at the critical support.
Bitcoin price fell to $9,200 to retest the broken resistance, after failing to clear the strong resistance at $10,000. The golden crossover took place two days ago, which may support the price in the coming weeks.