Death Cross and Golden Cross and Significance and the Effect in the Crypto Market

The death cross

A death cross is type of chart pattern that is associated with a potential downtrend. It is a pattern that forms on a price chart of a selected cryptocurrency pair when there is a potential downtrend reversal from an uptrend. It is the point where two moving average crosses each other, the short-term moving average crossing under the long-term moving average.

For instance, the death cross is the point where the 10 day moving average crosses under the 50 day moving average. The point where they cross is the death cross. A death cross is not a pleasant sign as it is an indication that there could be a potential downtrend.

The golden cross

A golden cross is a type of chart pattern that is associated with a potential uptrend. It is a pattern that forms on a price chart of a selected cryptocurrency pair when there is a potential uptrend reversal from a downtrend. It is the point where the short-term moving average crossing over the long-term moving average.

For instance, the golden cross is the point where the 10 day moving average crosses above the 50 day moving average. A golden cross is a good sign because it is an indication that there could be a potential uptrend.

Significance of death cross and golden cross in the crypto market

Both the death cross and golden cross are trend reversal patterns. The death cross is a bearish reversal signal which means that it signals that there could be a possible reversal to the downtrend.

The golden cross on the other hand is the opposite of the death cross as it is a bullish reversal signal which means that there could be a possible reversal to the uptrend. This is useful in trading because it gives traders an indication of a possible trend reversal so as to either enter or exit the market.

Effect of death cross and golden cross in the crypto market

Both the death cross and the golden cross have effect on the market in terms price action. Since the death cross is not a pleasant pattern, whenever it appears, there is always panic in the market as traders are most likely to exit the market. This means that there will most likely be more sellers than buyers which leads to the continuous fall in the price of the asset.

The golden cross is a pleasant pattern. Whenever the golden cross appears, there is always alertness in the market as traders are very looking to enter the market. This means that there will most likely be more buyers than sellers which leads to the continuous rise in the price of the asset.