Bitcoin, XRP and Ethereum – three of the most popular currencies in the cryptocurrency market – are about to form a 3-day golden cross at the same time.
This reference is rare, only a few times in the past in each individual asset. However, you have never run all of these 3 major cryptocurrencies at the same time. What exactly does this mean, and what are the results of the 3-day golden cross?
Bitcoin, XRP, and Ethereum Lead Recovery
The cryptocurrency market outlook is less bleak than it was just weeks ago, between BlackRock and other institutions seeking to launch Bitcoin ETFs and XRP and Ripple’s massive win against the US Securities and Exchange Commission (SEC).
Even the technical environment is starting to show signs of a potential bullish trend brewing. Notably, several major cryptocurrencies are getting closer and closer to the golden cross on the 3-day time frame, which has only happened a few times in the past.
This is about to happen to Bitcoin, Ethereum, and XRP, simultaneously, for the first time in their history. Previously, these signals reached different stages of previous bull markets. It wasn’t until the three gold coins intersected and he started a stronger rally.
Top 3 Crypto Assets – # BitcoinAnd Ethereum and #XRP – On the verge of a golden cross in the three-day timeframe
The three shootings had never happened at the same time before
It will also be the third in history for BTC and XRP, and the second ever for Ether pic.twitter.com/bzVfK3ZpBp
– Tony “The Bull” (tonythebullBTC) July 19, 2023
What is the golden cross in cryptography?
A golden cross occurs when a moving average of a higher time frame, usually a 200-period moving average, crosses above a moving average of a lower time frame, usually a 50-period moving average, from below. In contrast, the death cross occurs when the two cross from above.
These crossovers generate a buy or sell signal in a moving average based trading system. These systems are designed to capture the majority of the trend, but tend to miss a large portion of the early part of the rally as it waits for confirmation.
The 3-day golden cross throughout the years | BTCUSD on TradingView.com
Moving averages crossover: how does the signal stack up?
The only time the signal suffered a pullback was in Bitcoin in 2019. In all other cases, a buy signal using nothing more than a simple moving average crossover was hugely profitable with limited downside. In 2015, the 3-day BTCUSD golden cross generated more than 2000% ROI before reversing lower and giving a corresponding sell signal. XRP’s golden cross to death has saved more than 9,000% of the bullish gain. Ethereum did not release any signal at the time, due to insufficient price history.
Come 2019, Bitcoin had a misfire as the buy signal then stalled during a prolonged downturn. Neither XRP nor Ethereum gave any indication until 2020, when the entire crypto market started to come together. The 2020 ETHUSD golden cross held an ROI of over 1100% before the final cross closed the position. XRP failed to reach a new all-time high, but the golden cross still posted a 200% return on investment.
Even though Bitcoin was launched early in 2019 and continued to decline, the buy signal was still effective at the end of the day and held a 550% ROI by the time the death cross closed the position. Across the five historical buy signals, there has been an average of 2,570% ROI when the golden cross occurs. While such returns are unlikely in the future, this indicates that the signal is effective.
