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Bitcoin Nears Golden Cross Weeks After 'Trapping Bears' as U.S. Debt Concerns Mount
BTC nears golden cross, as Moody's downgrade validates bond markets' concerns about the sustainability of the U.S. fiscal debt.
May 18, 2025, 4:58 p.m.
What to know:
- Bitcoin's impending golden cross follows a recent death cross, which was a bear trap.
- A similar sequence occurred in the lead up to the latet 2024 price surge from $70,000 to $100,000.
- Moody's downgrade of the U.S. credit rating highlights fiscal concerns, potentially boosting bitcoin's appeal as a hedge.
Bitcoin's price chart is echoing a bullish pattern that foreshadowed the late 2024 price surge from $70,000 to $100,000 amid mounting concerns over the sustainability of the U.S. debt.
The leading cryptocurrency by market value appears on track to confirm a "golden cross" in the coming days, according to charting platform TradingView. The pattern occurs when the 50-day simple moving average (SMA) of prices crosses above the 200-day SMA to suggest that the short-term trend is outperforming the broader trend, with the potential to evolve into a major bull run.
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The moving average-based golden cross has a mixed record of predicting price trends. The impending one, however, is worth noting because it's about to occur weeks after its ominous-sounding opposite, the death cross, trapped bears on the wrong side of the market.
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A similar pattern unfolded from August through September 2024, setting the stage for a convincing move above $70,000 in early November. Prices eventually set a record high above $109K in January this year.
The chart on the left shows that BTC bottomed out at around $50,000 in early August last year as the 50-day SMA moved below the 200-day SMA to confirm the death cross.
In other words, the death cross was a bear trap, much like the one in early April this year. Prices turned higher in subsequent weeks, eventually beginning a new uptrend after the appearance of the golden cross in late October 2024.
The bullish sequence is being repeated since early April, and prices could begin the next leg higher following the confirmation of the golden cross in the coming days.
Past performance does not guarantee future results, and technical patterns do not always deliver as expected. That said, macro factors seem aligned with the bullish technical setup.
Moody's amplifies U.S. debt concerns
On Friday, credit rating agency Moody's downgraded the U.S. sovereign credit rating from the highest ”Aaa” to ”Aa1”, citing concerns over the increasing national debt, which has now reached $36 trillion.
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The bond market has been pricing fiscal concerns for some time. Last week, CoinDesk detailed how persistent elevated Treasury yields reflected expectations for continued fiscal splurge and sovereign risk premium, both bullish for bitcoin.
Read: BTC Boom Likely as Bond Yields Surge
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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