Golden Cross Sparks Caution as Rate Hike Odds Rise to 60%

The recent Bitcoin price rally is being driven by a technical indicator known as the golden cross. This occurs when an asset's short-term average price trend moves above its long-term average trend, signaling that recent buying momentum has overtaken the long-term trend.

This pattern has occurred 12 times since 2012, but its track record is mixed. Only three out of 12 crosses remained valid for a full year, resulting in an average return of 250% over that period. However, those nine other crosses yielded an average gain of around 24.9%, and the signal triggered false alarms roughly three times.

The golden cross has been confirmed by another indicator: the rising USDT dominance. This generally indicates capital shifting into stablecoins and away from Bitcoin and altcoins. Conversely, a declining share is considered bullish for Bitcoin as USDT flows into the assets.

The macro backdrop is not as supportive of the golden cross signal. The odds of a Fed rate hike rose to 60%, creating a short-term downside risk for Bitcoin. Stronger payroll data increased expectations of a rate hike for the FED's Sept. 15-16 meeting, adding uncertainty to the Bitcoin price prediction.