Golden and Death Crosses
The most popular and simplistic way to use moving averages is to divide the market into a bullish or a bearish one based on a cross. Even today, financial newspapers refer to these crosses as being really important and defining for a market. In order to look for a golden or a death cross, a daily timeframe needs to be open on the financial product one is interested in trading. In our case, let’s use the daily chart on the BTC/USD. The next thing to do is to apply two different moving averages on the chart: one that takes into account 100 as a period (MA100), and one that considers 50 as a period (MA50). This means that MA100 is plotting a value based on the values of the last 100 days, while the MA50 one is taking into account only the last 50 days.
The overall idea to interpret a market is quite simple: When the MA50 moves above the MA100, or it makes a cross, this cross is called a golden cross. It means that from that moment on the overall market turned bullish, and so buyers should dominate that market. The opposite is true as well: When the MA50 crosses the MA100 to the downside, the cross that is formed is called a death cross, and signals a bearish environment in the period ahead. The BTC/USD chart below shows both golden and death crosses, as the MA50 (the red line) crosses above or below the MA100 (the white one).
Best regards EXCAVO
The overall idea to interpret a market is quite simple: When the MA50 moves above the MA100, or it makes a cross, this cross is called a golden cross. It means that from that moment on the overall market turned bullish, and so buyers should dominate that market. The opposite is true as well: When the MA50 crosses the MA100 to the downside, the cross that is formed is called a death cross, and signals a bearish environment in the period ahead. The BTC/USD chart below shows both golden and death crosses, as the MA50 (the red line) crosses above or below the MA100 (the white one).
Best regards EXCAVO
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