A Golden Opportunity For Ethereum? 600% Buy Signal Returns
30 November 2023 - 5:00AM
NEWSBTC
Ethereum has formed a “golden cross” pattern on the 1-week
timeframe, marking the second such signal this year. While the
long-term implications could be very positive if history repeats
itself, there are reasons to temper expectations. A weekly golden
cross has formed | ETHUSD on TradingView.com Ethereum Golden Cross
And A Possible Target For New ATHs 1W ETHUSD has formed a golden
cross for the second time in 2023. A golden cross is a buy signal
in moving average-based trading systems. It suggests that the trend
is moving in an upward direction and because trends tend to
persist, this is notable. The golden signal occurs when a
shorter-term moving average (the 50-week MA) crosses through a
longer-term moving average (the 200-week MA) from below. A death
cross forms when the opposite happens. Related Reading: This
Pattern Points To $10,000+ Ethereum Price, But When? The last
confirmed golden cross for Ethereum in December 2020 preceded a
massive 600% rally over the next year to the asset’s all-time high
near $4,900. A repeat move of similar magnitude this time would put
Ethereum above $12,000—over six times today’s price of around
$2,000. However, it is important to note that not all golden
crosses lead to the anticipated upside. In 2023 alone, 1W ETHUSD
has death crossed and golden crossed twice now, demonstrating how
moving average-based systems are prone to whipsaw without an
established trend to follow. Above 20 on the ADX confirms the trend
| ETHUSD on TradingView.com An Uptrend Or More Whipsaw? How The ADX
Confirms Trends The whipsawing death cross and golden cross price
action on the Ethereum 1-week chart failed to generate
follow-through in either direction. So how can we be sure that this
isn’t yet another premature crossover? This is where the Average
Directional Index (ADX) comes in when gauging the validity of
moving average crosses. The ADX aims to measure trend strength,
typically on a scale of 0 to 100. Related Reading: Ethereum Price
Prediction for 2023, 2024, 2025, 2030 and Beyond As the 1-week ADX
edges up from below 20, it confirms growing momentum that reduces
the odds of more whipsawing price action. Traders often use such
ADX readings to confirm golden/death crosses and enter only the
most high-conviction signals. The 1W ETHUSD Average Directional
Index isn’t yet above 20, but is approaching this key level. Above
it, it gives the golden cross much more validity. Tony is the
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technical analysis education. Please note: Content is educational
and should not be considered investment advice. Featured image from
Shutterstock, Charts from TradingView.com
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