After reaching unprecedented all-time highs (ATHs), bitcoin has established a consolidation phase below the $120,000 benchmark. However, market observers have spotted an indicator that might suggest the possibility of a substantial price surge in the near future.
This indicator is known as the BTC golden cross. It forms when the 50-day simple moving average (SMA) intersects with the 200-day equivalent. While the golden cross often signals major price hikes, this isn’t always the case.
Merlijn, a renowned crypto trader, recently noted the reappearance of the bitcoin golden cross, indicating a potential parabolic surge for BTC in the ensuing months. The trader reminded that when the cross emerged in 2016, BTC soared by 139%, and in 2017, it skyrocketed by 2,200%. Bitcoin also experienced a 1,190% increase following the appearance of the golden cross in 2020.
Merlijn commented, “Now it’s reappearing in 2025 with a similar setup. Ignore this and you’ll regret it. Bitcoin is on the verge of skyrocketing.”
It’s important to note, however, that not every golden cross results in significant rallies. In September 2021, the golden cross appeared but only led to a 50% BTC rise. Another similar occurrence in October 2023 prompted a 45% hike in bitcoin’s value. These modest surges are often attributed to the 50-day SMA not maintaining a position above the 200-day equivalent for a prolonged duration.
Despite the potential for substantial gains, golden crosses don’t always guarantee a price surge. There have been instances when price crashes followed the cross due to adverse macroeconomic conditions. For example, the COVID-19 pandemic in February 2020 led to a 62% decline in bitcoin’s price after the golden cross emerged.
This illustrates why it’s crucial to consider broader technical and macroeconomic factors while interpreting the golden cross. Presently, analysts are optimistic that robust bitcoin fundamentals will foster a sustainable bullish trend. With supply dwindling and demand increasing, the likelihood of bears dominating the market in the upcoming weeks seems minimal.
However, according to market analyst Rekt Capital, BTC needs to secure a daily closing above $120,000 and a successful post-breakout retest to reach new peaks. Currently, the cryptocurrency is in a consolidation phase, allowing liquidity to flow into altcoins.
