Cryptocurrency Forecast; Golden Cross Confirmed, Outlook Bullish

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Ethereum Could Be Next To Make An Astounding Bullish Breakout Following Confirmation Of Golden Cross Indicator

If the last couple of weeks have been anything to go by, Ethereum’s future is bright. The altcoin has been recording significant gains and has managed to set a bullish pattern. Now Ethereum could be set for even greater gains in the days and weeks to come.

Ethereum has just confirmed its Golden cross , a common indicator that predicts bullish momentum on the horizon. Bitcoin itself confirmed its Golden cross just weeks before it rallied.

A golden cross appears when a short-term moving average rises above its long-term moving average.

Analysts are now predicting that Ethereum will climb above $300. This will especially be easy if the altcoin can break its current resistance of about $270 whilst enjoying the same record-breaking volume figure it saw last week. Ethereum recorded a new volume high during last weeks rally- around $19 billion.

Ethereum 2.0 To Be More Mature

Ethereum is in addition to having technical boosters expected to be pushed further up with the launch of the Ethereum 2.0. This upgrade is expected to see the network improve in scalability and adopt the proof of stake consensus. This will go along way in keeping up with emerging platforms such as EOS and Tron which have been preferred choices for many DApp developers in recent years.

In regards to building Ethereum 2.0, the Ethereum foundation has recently revealed that it plans to allocate $30 million towards the development of the platform, in it- Plasma and Ethereum 2.0. According to a post by the project, the foundation has been refocusing and taking a more mature stand:

“As the ecosystem has matured, the Ethereum Foundation has refined its focus. ‘Doing what is best for Ethereum’ doesn’t mean trying to do everything — it means focusing on where we can add the most value, and leaving space for others to add value in the areas that they will be the most effective.”

Notably, $3 million of the allocated $30 million has been earmarked for growth and awareness with the aim of attracting more developers to the network.

In the weeks and days to come, it seems that Ethereum might have much to celebrate in development and with it, prices will continue pushing higher. At the time of press, Ethereum is recording a marginal gain of less than 1% and exchanging for $252.

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DISCLAIMER Read More

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

Bullish Oil Price Outlook Supported by Golden Cross Formation

Oil Price Talking Points

The price of oil approaches the 2020 high ($66.60) following the US airstrike on Iran , and recent price action instills a bullish outlook for crude as a ‘golden cross’ formation take shape.

Bullish Oil Price Outlook Supported by Golden Cross Formation

The 2020 opening range is in focus for the price of oil as it trades at an eight-month high, and fears of a supply-side shock may keep crude prices afloat as Iran pledges to retaliate to the death of general Qassim Soleimani .

Unlike the reaction to the Saudi Arabia drone attack , growing tension between the US and Iran may have a more prominent impact on oil prices as President Donald Trump insist that “the United States will quickly & fully strike back, & perhaps in a disproportionate manner.”

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A disruption in oil output may put pressure on the Organization of the Petroleum Exporting Countries (OPEC) to boost production, but the group may emphasize its commitment to the ‘Declaration of Cooperation’ as Russia Energy Minister Alexander Novak pledges to uphold “ the agreement signed on July 2 to extend the deal until April 1 .”

It remains to be seen if OPEC and its allies will make a meaningful adjustment at the next meeting starting on March 5 as the group agreed to reduce output by another 500K b/d at the last conference in December, and the producers may regulate the energy market throughout 2020 as US production sits at a record high.

Recent figures coming out of the US Energy Information Administration (EIA) showed weekly field production holding steady at 12,900K in the week ending December 27, and OPEC and its allies may continue to counter the rise in US output as U.A.E. Energy Minister Suhail Mohammed Al Mazrouei insists that “ OPEC and OPEC+ members will be satisfied with a price ranging between $60 and $70 per barrel or even $80 .”

However, the Phase One trade deal may tame the recent rise in oil prices as the US and China , the two largest consumers of oil, appear to be on track sign the agreement on January 15, and OPEC may find it difficult to extend its production-cutting measures as “ oil demand is expected to grow by 1.1 mb/d .”

With that said, fears of a supply-side shock along with the commitment to the ‘Declaration of Cooperation’ may push the price of oil towards the 2020 high ($66.60), and recent price action instills a bullish outlook for crude as a golden cross formation take shape.

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Crude Oil Daily Chart

  • Crude appears to be on track to test the 2020 high ($66.60) as it clears the September high ($63.38), with the next topside hurdle coming in around $68.80 (23.6% retracement) to $69.20 (50% retracement).
  • However, failure to close above the Fibonacci overlap around $63.70 (38.2% retracement) to $64.60 (100% expansion) may raises the scope for a short-term pullback in the price of oil as the Relative Strength Index (RSI) fails to push into overbought territory.
  • In turn, the overlap around $59.00 (61.8% retracement) to $59.70 (50% retracement) sits on the radar, but the recent crossover in the 50-Day SMA ($58.49) and 200-Day SMA ($57.88) casts a bullish outlook for crude as a ‘golden cross’ takes shape.
  • Need a close above the Fibonacci overlap around $63.70 (38.2% retracement) to $64.60 (100% expansion) to bring the $65.90 (78.6% retracement) on the radar.

Bitcoin to Form Golden Cross but It Cannot Guarantee a Bull Run

Bitcoin traders are enthusiastic about a textbook technical indicator whose formation could send the asset’s prices higher.

Dubbed as Golden Cross, the candlestick pattern will occur when bitcoin’s short-term moving average closes above its long-term moving average. On the cryptocurrency’s daily charts, the 50-period MA is inches away from jumping above the 200-period one, fueling traders’ buying sentiment atop bitcoin’s 42 percent price rally in 2020.

Mixed Signals

But history shows that Golden Crosses are not always accurate in predicting long-term upside moves. In the Gold market, for instance, there have been many instances wherein the bullish continuation indicator has delivered a complete opposite of an upside run.

Commodity data analysts at Sunshine Profits noted that since 2009, purchasing gold after a golden cross formation did not deliver gains. In 2020, for instance, the gold market formed Golden Cross multiple times, only to result in unsustainable upside rallies.

“This means that the golden cross in gold is not a reliable bullish indicator and viewing it as such does not seem like a profitable thing to do,” wrote Sunshine Profits in one of their columns.

Gold’s Golden Cross over the recent history | Source: Sunshine Profits

In bitcoin’s case, the formation of a Golden Cross has yielded wild price rallies so far.

The last of such moves occurred in April 2020, wherein the price surged by 170 percent three months after making a Golden Cross. Similarly, the same candlestick pattern in October 2020 followed bitcoin registering one of the history’s biggest price rallies – from $300 to $20,000 in just two years.

But, it is the same asset that registered a massive drop after logging its all-time high at circa $20,000. In total, bitcoin is still trending almost 50 percent down from its historic top – and one indicator alone cannot promise to bring another $10,000 to its valuation.

Converging Bitcoin’s Fundamentals

Technical indicators lag fundamentals. Bitcoin was able to form a Golden Cross in 2020 because investors treated it as an insurance asset against the then-escalating US-China trade war and yuan devaluation. The technical pattern later extended because of the hype created by Facebook’s foray into the cryptocurrency sector with Libra.

But then, traders took their profits and crashed the prices from circa $14,000 to as low as $6,430 as regulators brushed aside Libra and US-China agreed to work out a deal.

Bitcoin’s imminent Golden Cross formation comes on the backing of two key catalysts: halvening and monetary easing.

With halvening, bitcoin’s daily supply rate is scheduled to get slashed down from 1,800 BTC to 900 BTC. At the same time, central banks’ decision to inject hundreds of billions of dollars into the economy as a measure to safeguard it from global risks is somewhat helping bitcoin as investors’ offbeat risk-on asset.

Therefore, should these catalysts sustain, investors have a reason to enter or stay put in the bitcoin market. It would further prolong the Golden Cross formation.

If not, the bullish formation could fail, as it did in the case of Gold in 2020.

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2020 – and has contributed to several cryptocurrency media outlets, including NewsBTC, FxDailyReport, Bitcoinist, and CCN.

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