Despite the carnage and chaos across the crypto market due to recent enforcement actions involving the US SEC, Ethereum has just given a bullish buy signal.
On weekly time frames, ETHUSD has formed a golden cross, but will it be enough to give the asset class a glimmer of hope amid so much darkness? Let’s take a closer look.
Ethereum Price Golden Cross Buy Signal Shapes on Weekly Chart
Ethereum prices are down about 20% from their 2023 highs, but are still down more than 60% from a record high in 2021. Hope for a recovery in the crypto market dimmed last week, when the SEC the United States launched enforcement actions against an already weakened market. industry.
Other coins have plunged 50% or more in just a few days, while Bitcoin and Ethereum have shown resilience as the top two cryptocurrencies by market cap. ETHUSD has done very well in the recent bearish environment, in fact, it has formed a golden cross from the 50-week moving average and the 200-week moving average.
The golden cross comes almost immediately after a death cross, overriding a long-term sell signal with a buy signal. When using a system of two moving averages, a buy signal is produced when the shorter time frame crosses the longer time frame. This is called a golden cross, while the opposite cross is called a death cross.
A golden cross appears | ETHUSD on TradingView.com
Will Moving Averages Save Crypto From Further Crash?
When using moving averages as a trading signal, in addition to crossovers, the fact that the price is above or below the averages is another sign that the trend is strengthening. ETHUSD is also well above the 50 and 200 week moving averages.
Finally, the slope of moving averages can be used in a similar way to a trend line. The 200-week moving average is still headed for an upward trajectory. Meanwhile, the 50 week is just beginning to turn upwards.
The last time the golden cross appeared, Ethereum was up another 680% before its peak. By contrast, the last time ETHUSD broke above both moving averages in 2020, Ether rallied over 1,700%. The current price action has only taken Ethereum below 5% since the time it broke above the two averages.
Past performance is not a guarantee of future results. Also, considering the macro and regulatory pressure on altcoins, another death cross could follow at any time. However, if ETHUSD can stay above the two averages, another impressive price rise could be just around the corner.
With all the noise out there in the market right now, everyone has completely missed the fact #ethereal has formed a weekly golden cross pic.twitter.com/ylNwp3DEUI
— Tony “El Toro” (@tonythebullBTC) June 12, 2023
