Despite the carnage and chaos all across the crypto market due to recent US SEC-related enforcement actions, Ethereum has just given a bullish buy signal.
On weekly timeframes, ETHUSD has formed a golden cross, but will it be enough to give the asset class a glimmer of hope amidst such darkness? Let's take a closer look.
Ethereum Price Golden Cross Buy Signal Forms On Weekly Chart
Ethereum prices are down roughly 20% off 2023 highs, but still down more than 60% from the record peak back in 2021. Hope for a recovery across the crypto market dwindled last week, when the United States SEC launched enforcement actions against an already weakened industry.
Other coins have plummeted by 50% or more in just days, while Bitcoin and Ethereum have shown resilience as the two top cryptocurrencies by market cap. ETHUSD has done so well in the recently bearish environment, in fact, is has formed a golden cross of the 50-week moving average and the 200-week moving average.
The golden cross comes almost immediately after a death cross, nullifying a long-term sell signal with a buy signal. When using a two-moving average system, a buy signal occurs when the shorter timeframe crosses the longer timeframe span. This is called a golden cross, while the opposite crossover is called a death cross.
A golden cross appears | ETHUSD on TradingView.com
Will The Moving Averages Save Crypto From Further Collapse?
When using moving averages as a trading signal, in addition to crossovers, price making it above or below the averages is another signal a trend is strengthening. ETHUSD is also well above both the 50- and 200-week MAs.
Finally, the slope of the moving averages can be used similarly to a trend line. The 200-week moving average is still pointed in an upward trajectory. Meanwhile, the 50-week is just starting to turn direction upward.
The last time the golden cross appeared, Ethereum climbed another 680% before its peak. In contrast, the last time ETHUSD pushed above both moving averages in 2020, Ether rallied by more than 1,700%. Current price action has only brought Ethereum under 5% from the moment it made it above the two averages.
Past performance is not a guarantee of future results. Plus, considering the macro and regulatory pressure on altcoins, another death cross could follow any day now. However, of ETHUSD can remain above the two averages, another impressive price increase could be around the corner.
Source: NewsBTC.com
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