Three of the most influential cryptocurrencies in the market, namely Bitcoin, XRP, and Ethereum, are about to form a 3-day golden cross simultaneously. This signal is uncommon, having only occurred a few times in the past for each individual asset. Nevertheless, it has never happened before that all three of these major cryptocurrencies have triggered this signal at the same time. What does this signal indicate, and what are the implications of the 3-day golden cross?
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Top 3 Coins Near Golden Cross Bitcoin, XRP, & Ethereum Lead Market Recovery
The outlook for the cryptocurrency market has improved significantly in recent weeks. This is due to institutions like BlackRock showing interest in launching Bitcoin ETFs and the recent legal victory of XRP and Ripple against the US Securities and Exchange Commission (SEC).
Additionally, the technical environment is starting to indicate a possible uptrend. Some of the top cryptocurrencies are approaching a golden cross on the 3-day timeframe, which has only happened a few times in the past. Bitcoin, Ethereum, and XRP are all about to experience this simultaneously, which has never happened before. In previous bull markets, these signals arrived at different stages. However, a stronger rally typically began once all three coins had a golden cross.
Three top crypto assets — #Bitcoin, Ethereum, and #XRP — are on the brink of a golden cross on the 3-day timeframe All three firing at the same time has never happened before It will also be the third in history for BTC and XRP, second ever for Ether pic.twitter.com/bzVfK3ZpBp — Tony “The Bull” (@tonythebullBTC) July 19, 2023
What Is A Golden Cross In Crypto?
A golden cross is a technical analysis pattern that occurs when a higher timeframe moving average, usually a 200-period MA, crosses above a lower timeframe moving average, typically a 50-period MA, from below. Conversely, a death cross takes place when the two moving averages cross down from above.
These crossovers can generate a buy or sell signal in a moving average-based trading system. Although these systems are designed to capture most of a trend, they may miss the early part of a rally as they wait for confirmation.
Moving Average Crossover: How Does The Signal Stack Up?
The signal using a simple moving average crossover has been highly profitable with limited downside, except for a drawdown in Bitcoin in 2019. In 2015, the BTCUSD 3-day golden cross yielded over 2,000% ROI before crossing back down and giving the corresponding sell signal. XRP's golden cross to death cross kept more than 9,000% of the uptrend's gains. Ethereum did not fire a signal back then due to insufficient price history.
Bitcoin had a misfire in 2019 where the buy signal sat through a long drawdown. Neither XRP nor Ethereum triggered a signal until 2020 when the entire crypto market started to rally together. The 2020 ETHUSD golden cross held onto over 1100% ROI before the death cross closed out the position. XRP failed to set a new all-time high, but the golden cross still clocked in 200% ROI.
Despite the early misfire in Bitcoin in 2019, the buy signal was ultimately effective and retained 550% ROI by the time a death cross caused the position to close. Across the five historic buy signals, there was an average of 2,570% ROI when a golden cross occurred. While such returns are unlikely in the future, this suggests that the signal is effective.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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