Bitcoin, XRP, and Ethereum are making waves in the cryptocurrency market as they are poised to form a simultaneous 3-day golden cross. This is a very rare occurrence, as each asset has only triggered this signal a limited number of times in the past. However, this is the first time that all three major cryptocurrencies have crossed each other at the same time. But what exactly does this mean, and what are the potential results of a 3 day golden cross?
The recent outlook for the crypto market is less bleak compared to the previous weeks. The involvement of institutions such as BlackRock seeking to launch a Bitcoin ETF and favorable decisions for XRP and Ripple against the US Securities and Exchange Commission (SEC) have played a key role in this positive turn. Moreover, the technical environment is showing signs of a possible uptrend, with some of the top cryptocurrencies inching closer to a gold cross in the 3-day timeframe, a rare occurrence in the recent past.
Bitcoin, Ethereum, and XRP will experience this phenomenon simultaneously for the first time in their history. In previous bull markets, these signals occurred at different stages, but it was only when all three coins experienced a golden cross that a stronger rally ensued. The convergence of the gold cross among the top three crypto assets is unprecedented, making for an exciting and potentially game-changing event.
A gold cross occurs when the higher timeframe moving average, usually the 200-period MA, crosses above the lower timeframe moving average, usually the 50-period MA, from below. Conversely, a death cross occurs when two moving averages cross from above. These crosses generate buy or sell signals in a trading system based on moving averages, whose aim is to catch most of the trend.
Interestingly, the buy signal generated by the golden cross has proven to be very profitable in the past, with limited downside. The only exception is Bitcoin in 2019, where the signal experienced a draw. In all other examples, however, the simple moving average crossover yields significant returns. For example, in 2015, BTCUSD’s 3-day golden cross earned over 2,000% ROI before a suitable sell signal. The XRP gold cross maintains over 9,000% uptrend gain, while Ethereum doesn’t have enough price history to trigger a signal.
In 2019, Bitcoin misfired with an initial buy signal which led to a prolonged draw. On the other hand, XRP and Ethereum didn’t trigger any signals until 2020 when the whole crypto market started to come together. The 2020 ETHUSD gold cross secured over 1100% ROI before the next death cross. Despite not hitting an all-time high, XRP gold crosses still deliver 200% ROI.
Although the Bitcoin buy signal 2019 experienced withdrawals, it eventually proved effective and maintained a 550% ROI at the time the death cross closed the position. Looking at the five historical buy signals, an average ROI of 2570% is observed when the golden cross occurs. While similar returns may not be expected in the future, this data suggests that the gold cross signal is well deserved.
The simultaneous formation of a 3-day golden cross in Bitcoin, XRP, and Ethereum is a landmark event in the cryptocurrency market. This rare event is unprecedented and has the potential to pave the way for an even stronger rally. Based on historical data, the golden cross signal has demonstrated profitability, although individual results may vary. Cryptocurrency enthusiasts will be closely monitoring these developments to see how the market responds to this unprecedented event.