Bitcoin [BTC], the largest cryptocurrency, is on track to complete its first golden cross since early February, a sign of strengthening bullish momentum in which the 50-day simple moving average (SMA) overtakes the 200-day SMA on an upward trajectory.

At press time, the 50-day SMA was $27,714 and rising, while the 200-day SMA was $28,174, according to charting platform TradingView. Bitcoin has rallied 30% in two weeks, tapping levels above $35,000, last seen in May 2022, CoinDesk data show.

A golden cross indicates that short-term price momentum is outperforming the long-term, potentially evolving into a bull run. The opposite of the golden cross is the death cross, in which the 50-day SMA drops below the 20-day equivalent.

While these indicators are widely-tracked by trend-following traders, they are based on backward-looking studies, and have a mixed record as standalone indicators of bullish and bearish trends. BTC has seen nine golden crossovers to date, of which three, dated July 11, 2014, July 15, 2015 and Feb. 19, 2020, were invalidated within three months by death crosses and notable downtrends.

The rest were followed by uptrends of varying degrees, as seen below.

Golden cross indicates a bullish shift in long-term trend. (TradingView/CoinDesk)

A trader holding a long position for a year following the occurrence of the first two golden crosses and the one in May 2020 would have made triple-digit percentage returns.

Bitcoin rallied to a record high of $69,000 in the weeks following the September, 2021, golden cross, only to almost entirely erase its gains by the end of the three months. Bitcoin later fell into a death cross.

The impending golden cross may live up to its reputation, given the optimism about a potential launch of a U.S.-based spot ETF, macroeconomic uncertainty and bitcoin's growing appeal as a haven asset and next year's mining reward halving.

"Halvings are viewed as having a bullish effect on the price of BTC by reducing the selling pressure emanating from miners but also reducing the pace at which BTC’s supply is diluted," Toronto-based crypto platform FRNT Financial said in an email on Wednesday.

Bitcoin's fourth reward halving, a programmed code to reduce the pace of BTC's supply expansion by 50% every four years, is due in April 2024.

Bitcoin Technical Analysis Markets

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team based in Mumbai, holds a masters degree in Finance and a Chartered Market Technician (CMT) member. Omkar previously worked at FXStreet, writing research on currency markets and as fundamental analyst at currency and commodities desk at Mumbai-based brokerage houses. Omkar holds small amounts of bitcoin, ether, BitTorrent, tron and dot.