Key takeaways:

Bitcoin is nearing a golden cross that led to 45–60% price rallies in the recent past.

Fundamentals like rising M2 supply and easing trade tensions support a bullish outlook.

Bearish divergence and overbought conditions show there’s still a risk of BTC falling below $100,000.

Bitcoin (BTC) will likely confirm a “golden cross” on its daily chart by the end of May, a technical pattern whose occurrences in recent years often preceded rallies.

Source: Benjamin Cowen

Previous golden crosses led to 45-60% BTC price rallies

As of May 20, Bitcoin’s 50-day simple moving average (50-day SMA; the red wave) was eyeing a close above its 200-day SMA (the blue wave) for the first time since October 2024, forming a golden cross.

BTC/USD daily price chart. Source: TradingView

Previously, BTC price had gained over 60%, with the reelection of Donald Trump as the US president playing a key role.

In October 2023, the golden cross was followed by a 45% BTC price rally, helped by Bitcoin ETF euphoria. September 2021 saw 50% gains in BTC price after painting a similar SMA crossover.

Bitcoin’s golden crosses can fail

Using indicators that worked in the past is not a guaranteed strategy.

Traders learned that in February 2020, when Bitcoin’s golden cross preceded a 62% price crash, primarily due to the global market rout led by the COVID-19 lockdowns.

BTC/USD daily price chart. Source: TradingView

That episode underscores the importance of using golden crosses with broader technical and macro indicators while factoring in the possibility of unexpected events.

As of now, Bitcoin’s upcoming golden cross aligns with mostly supportive fundamentals, placing the signal on the bullish side of the ledger.

Increasing M2 money supply and easing US-China trade tensions, for instance, have propelled bets on a new record high for Bitcoin.

Source: Michaël van de Poppe

What’s notable this time is that BTC is signaling a correction after its relative strength index (RSI) crossed above the overbought threshold of 70 earlier in May.

Related: Bitcoin trading in six-figure territory shows BTC is ready to carry gold’s ‘baton’ — Fidelity exec

So, instead of an immediate rally after the cross, Bitcoin may initially pull back toward its SMA supports, sitting around the $92,400-95,000 range as of May 20.

BTC/USDT daily price chart. Source: TradingView

A growing bearish divergence between the rising Bitcoin price and falling RSI furthers the chances of short-term downside. Nonetheless, some technical indicators see the BTC price rallying toward $150,000 in the coming months.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.