Steemit Crypto Academy Contest / S15W4 - Death Cross Vs Golden Cross

Hey Steemian friends!

Both the "Golden Cross" and the "Death Cross" are often used phrases for potential signs for shifts in trends in trading. Identifying them and the concepts behind them is quite important as a trader because of the market movements during these events. In today's contest I will share my knowledge on these.

👉 Explain in your own words, what is the golden crossing and what is the crossing of death?

One common factor for these crosses in financial markets is the usage of moving averages. The moving averages are calculated on historical price data for a certain time period and they provide certain possibility of a price fluctuations and reversal points in the current price action.

In order to identify a Golden or Death cross, we specifically look for the crossover of two moving averages. One has to be a shorter-term MA such as 50 N and a longer-term as 200 N. For many traders these numbers are the typical setup for a crossover.

^{Setting up MA Cross indicator with 50 & 200 MA lengths}

• Golden Cross:

In technical analysis, a Golden Cross occurs when a short term moving average (e.g: 50) crosses above a long term moving average (e.g: 200). This is considered bullish, suggesting a potential uptrend in the cryptocurrency's price.

Traders, sensing the bullish market sentiment use the Golden Cross as a confirmation tool to enter to the market with long positions or holding onto existing bullish positions.

• Death Cross:

Contrastingly, a Death Cross occurs when a short term moving average (e.g: 50) crosses below a long term moving average (e.g: 200). This is viewed as a bearish, suggesting to a potential downtrend in the market.

Since the event suggest bearish market sentiment, traders have a choice to consider short positions or adjusting their existing positions to account for potential downward movements.

However, it is important to note in both occurrences false signals can occur. Hence it is important to use additional analysis and risk management strategies to enhance the effectiveness of trading decisions.

Also, traders may use different combinations of moving averages to customize the Crosses based on their trading strategy, preferences and time frames.

👉 Use the BTC/USDT pair to show the golden crossover and the crossover of death, in tradingview. Also use the STEEM/USDT pair to show the golden cross and the death cross. Screenshots are required.

Crypto pair	BTC/USDT
Time Frame	01 Day
Indicator	MA Cross
Short MA	50, Orange
Long MA	200, Green

The below BTC/USDT pair indicate an occurrence of Golden Cross during the Oct 2023 Day frame. We can clearly see the MA 50 (Orange) line crosses above MA 200 (Green) line and the PA seems to move on upwards for coming days.

^{Golden Cross Scenario}

The below BTC/USDT pair indicate an occurrence of Death Cross during the Jan 2022 Day frame. We can clearly see the MA 50 (Orange) line crosses below MA 200 (Green) line and the PA seems to move on downwards after that.

^{Death Cross Scenario}

---

Crypto pair	STEEM/USDT
Time Frame	04 hours
Indicator	MA Cross
Short MA	50, Orange
Long MA	200, Green

The below STEEM/USDT pair indicate an occurrence of Golden Cross during the Sep 2023 04 hours frame. We can clearly see the MA 50 (Orange) line crosses above MA 200 (Green) line and the PA seems to move on upwards for coming days.

^{Golden Cross Scenario}

The below STEEM/USDT pair indicate an occurrence of Death Cross during the Dec 2023 04 hours frame. We can clearly see the MA 50 (Orange) line crosses below MA 200 (Green) line and the PA seems to move on downwards after that.

^{Death Cross Scenario}

👉 What is the difference between the golden crossover and the death crossover?

Golden Cross	Death Cross
Golden Cross suggest a bullish celebration.	Death Cross suggest a wake up of bears.
The short MA will cross above the long MA.	The short MA will cross below the long MA.
Potential Uptrend is forming.	Potential Downtrend is forming.
Long MA can act as a support.	Long MA can act as a resistance.

👉 In addition to these two chartist patterns, what other indicator would you add to make the technical analysis more effective at the moment of taking a decision.

As previously mentioned, we can't avoid false signals in the crypto market, however combining multiple indicators can help filter out those false signals and provide a more robust analysis.

To do that we can use famous indicators such as RSI, MACD or Volume Analysis. However, I always use Bollinger Bands and in this case too it works fine. As most of you aware BB has 3 lines with the middle band being an N-period simple moving average and the outer two lines indicating volatility of the market with standard deviations.

Taking the same previous example of STEEM/USDT pair Golden cross on Sep 2023, we can clearly see a 04 hours candle breaching the lower band. When the price is touching or crossing the outer bands in the BB indicator we usually assume that the market is in overbought or oversold conditions.

^{Using Bollinger Bands to confirm the reversal}

In this scenario, it can be considered that the market is oversold and the price is about to reverse. In the very next 04 hour candle seems to confirm the signal with "Golden cross" and now we have two confirmations from two indicators. It is an additional insight to enter the market with confidence.

Thank you for this educative contest @crypto-academy. Looking forward to taking on the next week’s challenge. I would like to invite @dexsyluz, @mostofajaman & @paholags to participate in this contest.
Thank you.

Peace to all 🙏

^{All the images are screen shots from trading view.}