Bitcoin Nears Golden Cross — Will It Trigger a Rally or a Trap?

Bitcoin (BTC) is approaching a golden cross on its daily chart — a technical signal where the 50-day moving average (SMA) crosses above the 200-day SMA, often interpreted as a sign of long-term bullish momentum.

As of May 20, BTC is trading around $105,000, with the crossover likely to be confirmed by the end of May. This would mark the first golden cross since October 2024, a period that kicked off a major rally to all-time highs.

Past Golden Crosses Sparked Major Gains

Historically, golden crosses have preceded strong price rallies for Bitcoin:

• October 2024: BTC surged over 60%, supported by political tailwinds like Donald Trump’s reelection.

• October 2023: A golden cross led to a 45% rally, boosted by optimism around Bitcoin spot ETFs.

• September 2021: BTC gained 50% following a similar crossover.

These past performances fuel optimism among bulls that a repeat rally could be on the horizon — potentially lifting BTC toward the $150,000 level in the coming months.

Source: Benjamin Cowen

Not All Golden Crosses Deliver

However, golden crosses are not infallible. In February 2020, Bitcoin formed a golden cross — only to see its price plunge 62% shortly after, as global markets crashed due to the COVID-19 pandemic.

This example underscores that while golden crosses are bullish indicators, they should not be used in isolation. Broader market sentiment, macroeconomic factors, and technical signals all play a role.

BTC/USD daily price chart. Source: TradingView

Bearish Divergence and RSI Suggest Pullback Risk

Despite the bullish setup, short-term risks remain:

• Bitcoin’s RSI (Relative Strength Index) crossed above 70 in early May, signaling overbought conditions.

• A bearish divergence has formed, with BTC price rising while RSI trends lower — a potential warning sign of weakening momentum.

• This could result in a short-term correction, with BTC possibly pulling back to support zones near $92,400–$95,000, where both moving averages currently sit.

Source: Michaël van de Poppe

Macro Factors Still Favor Bulls

On the macro side, several key fundamentals are providing tailwinds:

• M2 money supply — a broad measure of cash and liquid assets — is increasing, typically a positive signal for hard assets like Bitcoin.

• Easing US-China trade tensions have reduced global market uncertainty, boosting risk appetite among investors.

These supportive macro trends give the upcoming golden cross a more favorable context than some past occurrences, making a longer-term rally more plausible — though a near-term pullback remains likely.

BTC/USDT daily price chart. Source: TradingView

Outlook

Bitcoin’s golden cross setup aligns with historical patterns that have previously triggered large rallies. While short-term caution is warranted due to technical overextension, the combination of strong institutional interest, macro tailwinds, and the golden cross signal suggests Bitcoin may still have significant upside potential in the months ahead — potentially toward the $150,000 level.