The Golden Cross has arrived – is this officially the Bitcoin bull market?

The biggest news of the day and of the new bull season is the golden cross on the bitcoin chart.

It’s going to be all over the internet. On the daily price chart for bitcoin the 50 EMA has crossed the 200 EMA in an upward trend. In other words the average price over the past 50 days has risen to meet the average price over the past 200 days. Well almost, since it is still a few dollars apart on the Bitfinex chart, but that is all in the process of unfolding into a golden handshake before an actual golden cross. Bitcoin looks like it has been in a bull trend since late December last year, about four months now. $3200 or thereabouts was the lower low for the bear market. There are so many clues on both sides of the aisle saying that we have bottomed out or we haven’t bottomed out. It’s a mixed time, a time of change to the upside while not yet believing it. It could be something like "hopium" or disbelief.

The weekly RSI has also broken above the 50 level in the middle and is now on the upper half of the graph, but only just. This and the golden cross really look like a bullish indicator while simultaneously bitcoin makes a further massive surge up toward $5600 or just above. This is a new milestone having gained over 75% so far this year since the mid December low. This current month of April could be the best month since the previous bull market in 2017, as bitcoin rises 35% so far with a week to go.

It looks too good to be true. Perhaps we have been lulled into hibernation with all the bearish momentum in price, but now as Spring approaches, it looks like life is returning and bitcoin price is rising again. The Chinese year of the pig really is supposed to be prosperous this year. We may well have seen the bottom, and even if we haven’t this is a great time to invest by dollar cost averaging into bitcoin. By purchasing a portion each month your investments even out in price over the bear market phase since no one can really time the bottom fully.

The only technical indicator that still looks bearish is the weekly Stochastic RSI which is at the top of overbought and has a lot of momentum stored up for a move to the downside for a few weeks after this potential climb to $6000 where we will find huge resistance. In fact the Stochastic has been maxxed out at 100 or close to for 6 weeks now. The last time it was so overbought for 6 weeks running was November to mid December 2016. During that time price climbed over 60% over those six weeks, all with the Stochastic RSI at or near 100 overbought on the weekly, like we have just seen. But so far we have only climbed 47% in the past six or seven weeks. Curiously a price climb to $6000 would be a 58% climb over the past seven or eight weeks if we can hold out another week at maximum overbought.

But let’s be honest, we don’t see a golden cross very often. The last time we saw it was in 2015. That says a lot. The daily RSI may be showing a bearish divergence and price wants to roll over and turn down. Looking at the past chart, even after the last golden cross, there was a retracement to almost as low as before but not quite, meaning we may not ever see below $4000 again but may retrace to somewhere around there, for example.

That’s just my opinion, and not investment advice. That being said you still get the bearish group who will wait for price to drop below $3000 and have buy orders waiting that low. I wish I was that patient. Warren Buffet said the market is all about moving money from the impatient to the patient. Dollar cost averaging is a way to cultivate patience because you don’t buy in all at once but rather satisfy the urge to invest but in a regulated way. Then as the following opportunity arises a month later, you buy in again and so on. It helps when you find yourself pre-empting the low and buying in too early. Buy staggering the buys, you soften the impact. If you have already missed the bottom then there will be one more chance in coming months to buy in around $ 4000, and then bitcoin price will want to climb up toward the next halving in May 2020, just over a year from now.

In previous years bitcoin spent the year leading up to the halving steadily making higher highs. So this final upcoming retracement that I imagine will roll in soon, may give us the last opportunity to catch some sub- $5000 bitcoin between now and late May, over the next four weeks. I used to be convinced we would still see the lows of $3200 again, or even the Hyperwave theory of $1000 propounded by Tyler Jenks, but I’m less convinced as price rises. It’s always possible but the odds are slim, so I wouldn’t put much into that purchase order. I would start buying in already and be prepared to buy in around $4000. That’s a safe way to do it, when a thousand here or there in price won’t make too much difference when price is going to the Moon in a few years.

If you want to make money on the way to the Moon by day trading or swing/momentum/range trading then that’s another game besides that of the Hodler. A good strategy is to divide up your investments into long term and short term, and be sure to keep them clearly defined in your mind so that you don’t overstretch yourself. Have a long term strategy and stick to it. At a time like this when the golden cross arrives, you can be fairly sure we are on our way up again and so you could start buying in each week as your salary arrives or each month. It works like a pension fund for the workers of the world fixed to the rat race to survive.

All you need to free yourself from that wheel is a good bull run with prior well timed investments, and of course some faith in the project and its future. I would estimate that the next bull run will take place over the next two years and peak beyond the previous ATH (all time high) by a factor of five on average, taking the new ATH to $100 000 conservatively speaking. So that is the long term goal for me.

That being said, playing the long game means having an exit strategy in two years from now that allows you to sell at the top or power down in time to catch the top and that is a rare skill. The weekly and monthly price graphs may assist there, but even now the weekly is screaming overbought on the Stochastic RSI but still bitcoin climbs, so the indicators are often lagging slightly and more like guidelines really to a price movement which has a life of its own and is organic and spontaneous, like a whimsical muse on the trading platform of life.