Bitcoin (BTC) Price Drops After Golden Cross, Is This a Normal Correction?

Recently, Bitcoin (BTC) experienced what is called a golden cross, where the 50-day EMA crossed above the 200-day EMA.

Recently, Bitcoin (BTC) experienced what is called a golden cross, where the 50-day EMA crossed above the 200-day EMA. This phenomenon is usually considered a bullish signal in the trading world. However, not long after that, the price of Bitcoin (BTC) experienced a sharp decline from a peak of around $112,000 to trend support above $107,000. While this drop has some traders worried, there are several reasons why this drop is actually normal and could even be considered healthy for further price development.

Post Golden Cross Technical Analysis

According to analysis from several experts, it is common for Bitcoin (BTC) prices to drop after a golden cross. This is often the result of traders securing profits after a period of rising prices. Although a golden cross indicates a long-term bullish trend, it is not uncommon for short-term price drawdowns to occur as part of a market cycle.

Also, despite the decline, the price of Bitcoin (BTC) is still above the critical support level, which is the $102,000 breakout zone. The RSI indicator shows a reading of 69, declining from a near-overbought state, indicating that momentum is still present despite the decline. This suggests that this decline is more of a healthy correction than a trend reversal.

Also Read: Astonishing Prediction: Bitcoin Will Break $250,000, Really?

Volume and Market Support

One important indicator in market analysis is trading volume. In the case of this Bitcoin (BTC) price drop, the trading volume showed a decrease, which could be interpreted as a decrease in panicked selling interest. This is a positive sign as it indicates that the price drop was not accompanied by a massive exodus of investors.

It is also important to note that the support levels at $102,000 to $105,000 remain intact. As long as Bitcoin (BTC) price remains above this range, the long-term bullish structure is still considered valid. This provides an opportunity for the market to stabilize before the next potential price spike.

Bitcoin (BTC) Long-term Outlook

Although the golden cross may lose some of its luster in the short-term, this doesn’t change Bitcoin’s (BTC) long-term bullish outlook. Corrections like this are often necessary to reset leverage and market positions before resuming the uptrend. This is part of healthy market dynamics and provides an opportunity for investors to enter at lower levels before the next spike.

In other words, the market structure that has been in place since Bitcoin (BTC) broke $100,000 is still solid. This short-term consolidation is expected and does not change the broader bullish outlook that the market has established.

Conclusion

While the post-golden cross price drop may have surprised some market participants, it is part of the normal cycle in Bitcoin (BTC) trading. Investors and traders are advised to pay attention to key support levels and trading volumes when assessing the long-term outlook. With the structure still supporting the bullish trend, this could be an opportunity to strengthen positions before the next wave of gains.

Also Read: XRP Ledger Activity Decline Reaches 90%: What’s the Impact?

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This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying andselling Bitcoin and other crypto asset investments are the responsibility of the reader.