An important event has occurred in the cryptocurrency market that has attracted the attention of analysts and investors: a “golden cross” has formed on the weekly charts of altcoins’ market capitalization. This technical pattern is traditionally seen as a strong bullish signal, indicating the potential start of a new upward trend for alternative cryptocurrencies. However, like any technical indicator, the golden cross is not an absolute guarantee of further growth, and experts have different opinions on what lies ahead. Let’s dive into what this signal means, how it could affect the altcoins market, and why it’s important to be prepared for unexpected turns of events.
What Is a “Golden Cross” and How to Recognize It?
A golden cross is a technical indicator that occurs when a short-term moving average (such as the 50-day MA) crosses above a long-term moving average (such as the 200-day MA). This crossover signals a potential bullish trend as short-term prices begin to overtake long-term ones, indicating an increase in market activity and further trend strengthening.
The golden cross is a powerful signal for traders and has historically often preceded significant price increases in assets. In the history of the cryptocurrency market, this pattern has proven effective, especially for altcoins. A notable example occurred in 2020 when many altcoins showed gains of tens of percent after a golden cross formation.
Signal for Altcoins: Possible 95% Growth
In recent days, a situation has developed on the market capitalization charts of altcoins that has sparked a lot of discussions among analysts: a golden cross has formed on the weekly charts. For many traders and investors, this is a positive sign and suggests the likelihood of a new bullish trend for altcoins.
Trader Merlijn The Trader, known for his attention to technical patterns, notes that the last time a golden cross formed in the altcoins market, these assets showed an impressive 95% growth. This could serve as a benchmark for those expecting the trend to continue. Given the current situation, many analysts view this pattern as a signal of possible price growth for altcoins in the coming months.
A 95% increase could be quite significant for the altcoin market, which is traditionally more volatile than Bitcoin. Altcoins might attract even more investors if the bullish trend is confirmed, leading to an increase in the overall market capitalization.
Controversies and Skepticism: The Opinion of Jordi Alexander
However, despite the positive forecasts, not everything is so straightforward. Jordi Alexander, founder of the investment company Selini Capital, expresses doubts about whether we will experience a traditional altseason. He warns that while the golden cross is a strong technical signal, there isn’t enough liquidity in the cryptocurrency market to support altcoin growth.
Alexander explains his position by the lack of major liquidity sources, such as institutional investors or significant capital inflows, that could bolster altcoin growth. According to him, the market is currently in uncertainty, and there is no clear support for altcoins from large players, which may limit their growth potential.
Moreover, he warns that altcoins do not always follow Bitcoin, and even in the case of a strong bullish trend for the leading cryptocurrency, other coins may not show similar results. Past altseasons have often been accompanied by volatility, and even with strong growth signals, sharp corrections or flat trends in the altcoin market have been observed.
A Market Without Major Liquidity Sources: The Danger of a Correction
One of the main issues for altcoins, according to Jordi Alexander, is the lack of major players influencing the market with their capital. Without significant inflows from institutional investors or large funds, altcoin growth may be limited.
Moreover, the cryptocurrency market remains highly volatile, and even with the golden cross, there is no guarantee of stable growth. Sometimes such patterns lead to short-term growth, but the market may then face a sharp correction. Investors looking for short-term gains may experience unexpected drops.
What Should Investors Expect?
As history has shown, a golden cross can be a strong signal for growth, but it is important to consider the risks associated with market volatility. At the moment, despite the formation of the pattern, analysts recommend that investors proceed with caution and be prepared for unpredictable market movements. The cryptocurrency market can change suddenly, and the lack of major liquidity sources, according to some experts, limits the chances for sustainable growth in altcoins.
Investors should closely monitor the situation in the market and make decisions based not only on technical indicators but also on fundamental factors. This includes news about cryptocurrency regulation, potential large investments, and changes in liquidity in the market.
The formation of a golden cross on the altcoin market capitalization chart is an important signal for traders and investors, which in the past has often heralded a strong bullish trend. However, as experts point out, it is important not to rely solely on this pattern. Market conditions remain unstable, and sustainable altcoin growth requires more liquidity and institutional investments.
In any case, investors should remain flexible and ready for potential corrections. The cryptocurrency market doesn’t forgive rash decisions, and even with strong signals like the golden cross, it’s important to always be prepared for possible changes in market conditions.
