Definition of the Golden Cross and Death Cross

The golden cross and death cross are signals based on the crossing of moving averages. The 50-day moving average (MA50) represents the recent trend, while the 200-day moving average (MA200) reflects the underlying trend. When the MA50 crosses above the MA200, it indicates a golden cross, a bullish signal. Conversely, when the MA50 crosses below the MA200, it signals a death cross, often seen as a precursor to declines. However, these crossings do not predict future movements but confirm already established trends. For example, on June 21, 2021, Bitcoin experienced its first death cross since March 2020, when its price was around $31,000. Despite concerns, Bitcoin rebounded and reached a new all-time high of $68,982 on November 10, 2021. Moving average crossings should be used with caution, combining them with other indicators such as support and resistance levels, volume, and market structure.

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