Golden Cross in Crypto: What It Is and How to Use It
- rachelbeautybar
- Aug 18
- 3 min read
The Golden Cross is a bullish technical indicator that occurs when a short-term moving average (MA) crosses above a long-term moving average. In most cases:
The 50-day MA (MA50) is used as the short-term indicator.
The 200-day MA (MA200) is used as the long-term indicator.
This crossover signals a potential shift from a downtrend to an uptrend, often seen as the start of a strong bullish phase in the market.
In contrast, the opposite signal is called the Death Cross, when the MA50 falls below the MA200, indicating possible bearish momentum.
How the Golden Cross Works in Crypto
The Golden Cross usually unfolds in three main phases:
1. Accumulation Phase – Preparation
The market consolidates after a downtrend, often moving sideways with low volatility. The MA50 gradually approaches the MA200.
Key signs:
Price stabilizes with small movements.
Trading volume remains low.
The MA50 is still below the MA200 but getting closer.
Example: In June–July 2021, Bitcoin consolidated around $30,000 with low trading volume, before forming a Golden Cross in July.
2. Golden Cross Signal – Breakout Confirmation
This is the key moment when the MA50 crosses above the MA200. It indicates growing buying pressure and often sparks strong bullish sentiment.
Key signs:
Price starts trending upward, sometimes with sharp breakouts.
Trading volume increases significantly.
MA50 moves above MA200, confirming bullish momentum.
Example: On July 14, 2021, Bitcoin’s MA50 crossed above its MA200. Shortly after, BTC rallied from $30,000 to over $69,000 by November 2021.
3. Growth Phase – Bullish Trend
After the Golden Cross, the market often enters a strong uptrend. Investors typically hold positions to maximize gains, though minor pullbacks may occur.
Key signs:
Price continuously breaks resistance levels and forms new highs.
Strong trading volume confirms bullish participation.
MA50 remains well above the MA200, strengthening the signal.
Example: After the Golden Cross in July 2021, Bitcoin surged to its all-time high of $69,000 by November 2021.
How Beginners Can Use the Golden Cross
1. Using Charting Tools
Platforms like TradingView or Binance charts allow you to add MA indicators:
Set MA50 (short-term).
Set MA200 (long-term).
Watch for MA50 crossing above MA200 on daily (D1) or weekly (W1) charts.
2. Confirming with Other Indicators
Golden Cross is powerful but not foolproof. Always confirm with other signals:
RSI (Relative Strength Index):
RSI 30–70: Balanced market.
RSI >70: Overbought, possible correction.
MACD: Bullish if MACD line crosses above the Signal line.
Volume: Stronger signal if volume increases alongside the crossover.
3. Finding Entry Points
Watch for the crossover moment.
Confirm with RSI, MACD, and resistance breakouts.
Use DCA (Dollar-Cost Averaging) to split entries and reduce risk.
4. Managing Risks
Set profit targets in advance.
Always use stop-loss orders.
Review trades to refine strategy over time.
Limitations of the Golden Cross in Crypto
While the Golden Cross is a strong signal, it’s not perfect:
It appears after a trend reversal begins, meaning investors might miss the very bottom.
The crypto market is volatile, and external factors (e.g., regulations, hacks, FUD) can invalidate the signal.
In sideways markets, Golden Cross may produce false signals.
It works better for long-term trends than short-term trades.
Conclusion
The Golden Cross in Crypto is a popular technical indicator that helps traders spot potential bullish momentum. By combining it with RSI, MACD, and trading volume analysis, beginners can use it as part of a broader trading strategy.
However, it’s not a guaranteed profit tool—risk management and confirmation with other indicators remain essential.
In the end, the Golden Cross is best used as a guide to long-term trends, rather than short-term price predictions.
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