Bitcoin's golden cross technical signal breaks down as interest rate expectations shift market sentiment.
Macro & Markets ·
Bitcoin's daily 50-day exponential moving average dipped back below its 200-day EMA on Friday evening as the asset retreated to $77,438, erasing a golden cross that had briefly formed earlier in the session. The pattern, which technical traders view as a bullish trend signal, lasted only hours after BTC spiked to an intraday high near $79,837 before rolling over. The 4-hour chart's golden cross remained intact, though momentum had cooled.
The reversal coincided with a sharp repricing in interest rate expectations. After today's core CPI reading came in hotter than forecast at 0.3% versus 0.2% expected, odds of a 25-basis-point Fed rate hike at next week's meeting surged to 86.5% from roughly 69% immediately after the inflation data. Rate hikes typically trigger risk-off sentiment, pressuring risk assets like Bitcoin and equities.
The golden cross's rapid reversal underscores the fragility of the signal when moving averages trade closely together. A single volatile session—or even intraday swings before a daily candle closes—can toggle the crossover back and forth. While the Average Directional Index reading of 45 suggests underlying trend strength remains solid, whether the pattern will re-establish depends on price action in coming sessions and any further shifts in rate expectations.