Bitcoin forms a “Golden Cross” pattern on the technical charts indicating further bullish price action.
The world’s largest cryptocurrency Bitcoin (B T c) has recently been consolidating around the $34,400 level with the Bank of Japan (BOJ) deciding to soften its grip on the “yield curve control” program.
On Tuesday, the central bank maintained its policy of negative interest rates and kept the short-term policy rate at -0.1%. Nevertheless, the BOJ indicated that it would view the 1% upper bound for the 10-year government bond yield as a “reference” rather than an inflexible limit.
This adjustment would allow greater fluctuations in yields and reduce the need for the BOJ to intervene with bond purchases aimed at injecting liquidity every time the 10-year yield gets close to the previous hard cap of 1%.
Bitcoin tends to reflect changes in global fiat liquidity, with the BOJ’s Yield Curve Control (YCC) acting as an important source of liquidity since 2016. According to some analysts, the Bank of Japan’s recent adjustment appears to be a subtle deviation from the accommodative YCC program. This change guarantees prudence for traders involved in liquidity-sensitive risk assets such as cryptocurrencies.
Bitcoin ‘golden cross’ ahead
Now, let’s look at the weekly chart for a more detailed view. Bitcoin has been battling a two-year period of bear market, which started with an all-time high of $69,000 in November 2021, driven by signals from the Federal Reserve indicating a change in monetary policy.
During this period, the cryptocurrency reached its lowest point around $16,000, but has gradually recovered over the past year.
Examining the peaks and valleys of Bitcoin during these two years shows that the Fibonacci 0.236 level has turned into support as of last week. According to this analysis, we identify the next obstacle around the $36,500 range, which corresponds to the Fibonacci 0.382 level. As a result, Bitcoin’s valuation, in both the short and long term, designates the $35,500 – $36,500 range as a key resistance zone.
With a successful breach of this price range, BitcoinIt appears that the long-term outlook will target $42,000. Particularly noteworthy is the promising development related to the medium and long-term exponential moving average (EMA), which recently displayed an upward crossover, indicating a bullish trend.
A notable aspect of the Bitcoin chart concerns the position of the 50-day moving average (MA) and the 200-day MA. In September, Bitcoin suffered a “death cross” when its 50-day moving average fell below the 200-day moving average, traditionally a harbinger of more significant price declines.
However, the negative sentiment was averted as buyers successfully kept Bitcoin’s value above the $25,700 support, increasing optimism for its future prospects. Moving into October, Bitcoin has shown a change in momentum and is now on the verge of forming a “golden cross”, indicating a positive crossover at the important moving average.
While technical indicators suggest a strong rally, the “Golden Cross” effect could likely outweigh the “Death Cross” effect, positioning the largest cryptocurrency to continue its uptrend until It maintains support at short-term levels.
Bhushan is a fintech enthusiast and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in a constant process of learning and keeps himself motivated by sharing his acquired knowledge. In his spare time he reads adventure fantasy novels and occasionally explores his culinary skills.
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