Golden Cross Fades: Bitcoin's Brief Uptrend Derailed by Rising Rate Hike Expectations
Bitcoin's (BTC) 'golden cross' pattern, considered a bullish signal in technical analysis, proved short-lived. The cryptocurrency surged to $79,837 on yesterday, causing its 50-day exponential moving average (EMA) to cross above the 200-day EMA. However, this positive signal was quickly lost when BTC retreated to approximately $77,438, causing the 50-day EMA to fall back below the 200-day EMA.
The sudden decline in Bitcoin's price coincided with a sharp increase in expectations of a Fed interest rate hike following the release of US inflation data. The core consumer price index (CPI) rose 0.3% on a monthly basis, exceeding market expectations of 0.2%. As a result, the probability of a 25 basis point interest rate hike by the Fed at its next meeting increased from approximately 69% to 86.5%, according to CME FedWatch data.
Despite the short-lived 'golden cross' pattern, technical indicators suggest that Bitcoin's medium-term outlook has not completely turned negative. On the four-hour chart, the 50-period EMA remains above the 200-period EMA, and the golden cross pattern in this timeframe is maintained.