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What is a golden cross pattern and how does it work?

A golden cross is one of the most popular bullish signals for cryptocurrency traders but it does not necessarily mean you should immediately enter the…

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A golden cross is one of the most popular bullish signals for cryptocurrency traders but it does not necessarily mean you should immediately enter the market.

A golden cross pattern on the charts excites crypto traders for its promises of profitable opportunities ahead, largely due to its impressive success rate in traditional markets.

The golden cross tends to preceded sustained uptrends in contrast with the bearish death cross pattern. For instance, since 1970, the S&P 500 has been returning about 15% gains on average in less than a year after a golden cross's occurrence.

The golden cross's record in the benchmark crypto asset Bitcoin (BTC) is similarly impressive. Notably, the indicator has appeared seven times on Bitcoin daily charts since 2010, out of which five have led to massive bull runs.

What is a golden cross pattern?

Before discussing the golden cross, let's discuss its core component known as moving averages (MA).

A moving average records the average change in an asset's price over a specific period. Mathematically, they are measured after adding a set of prices (recorded in a fixed timeframe such as hourly, four-hour, daily, weekly, monthly, etc.) — and by dividing the sum by the number of prices in the set.

Moving average examples

Traditionally, golden cross watchers focus on two specific moving averages: the 50-day moving average, which becomes the short-term MA, and the 200-day MA as the long-term moving average.

A golden cross pattern forms when the short-term MA crosses above the long-term MA. In other words, the pattern shows that buying interest in a particular market has risen over the previous 50 days, compared to the previous 200 days.

Golden cross illustration

How does a golden cross work?

Golden crosses typically precede significant price rallies across traditional and crypto markets, a reason why traders perceive them as buy signals.

BTC/USD daily price chart featuring March 2020 golden cross and a ~750% rally afterward. Source: TradingView

But there have been cases where golden crosses have been followed by fake breakouts. Therefore, one should consider the golden cross pattern alongside other technical indicators before making a decision.

For starters, traders can employ the relative strength index (RSI), a momentum oscillator that determines an asset's overbought and oversold conditions, to predict potential price pullbacks.

Related: What is a Doji candle pattern and how to trade with it?

In February 2020, this strategy may have helped many traders avoid deeper losses. Let's see why. 

On Feb. 1, 2020, Bitcoin's 50- and 200-day MA formed a golden cross when it traded for around $9,500. A modest euphoria followed, and the price moved to as high as $10,500 in the next two weeks. The period also saw Bitcoin's daily RSI rise above its overbought threshold of 70.

BTC/USD daily price chart with fake golden cross breakout. Source: TradingView

Bitcoin's overbought conditions resulted in a decline toward its 50- and 200-day MA (the $8,500-$9,200 range). But its price eventually collapsed below $4,000 entering March, in line with a global market meltdown led by the beginning of the Covid-19 pandemic.

The case study explains that golden crosses are not 100% accurate in predicting future trends. Instead, they could merely assist traders and analysts by employing momentum indicators as well as fundamentals to forecast price actions in the short and long term. 

These momentum indicators could include Moving Average Convergence Divergence (MACD), Stochastic RSI, Rate of Change (ROC), Average Directional Index (ADI), and others.

In other words, traders are advised not to buy too early into a golden cross formation. Instead, they could wait for the price to consolidate sideways or lower and find short-term support before deciding to enter a trade.

It's possible to also alter the definition of a golden cross in volatile market conditions by changing moving averages.

For instance, using the 20-period MA for the short-term MA and the 50-period MA for t long-term MA. The 20-50-day MA combination has historically helped traders determine short-term crypto market trends, as shown below in the March 2020-November 2021 bull run.

BTC/USD daily price chart featuring 20-50 MA crossovers. Source: TradingView

Golden crosses don't mean guaranteed gains

While golden crosses frequently do indeed appear before major price rallies in Bitcoin and cryptocurrency markets, the risk of bulls falling into a trap remains. 

Ultimately, traders should be cautious with crossover signals, as blindly following them might result in losses. As discussed above, false signals can occur and it's important to confirm any golden cross with additional technical indicators before making any trades.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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One city held a mass passport-getting event

A New Orleans congressman organized a way for people to apply for their passports en masse.

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While the number of Americans who do not have a passport has dropped steadily from more than 80% in 1990 to just over 50% now, a lack of knowledge around passport requirements still keeps a significant portion of the population away from international travel.

Over the four years that passed since the start of covid-19, passport offices have also been dealing with significant backlog due to the high numbers of people who were looking to get a passport post-pandemic. 

Related: Here is why it is (still) taking forever to get a passport

To deal with these concurrent issues, the U.S. State Department recently held a mass passport-getting event in the city of New Orleans. Called the "Passport Acceptance Event," the gathering was held at a local auditorium and invited residents of Louisiana’s 2nd Congressional District to complete a passport application on-site with the help of staff and government workers.

A passport case shows the seal featured on American passports.

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'Come apply for your passport, no appointment is required'

"Hey #LA02," Rep. Troy A. Carter Sr. (D-LA), whose office co-hosted the event alongside the city of New Orleans, wrote to his followers on Instagram  (META) . "My office is providing passport services at our #PassportAcceptance event. Come apply for your passport, no appointment is required."

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The event was held on March 14 from 10 a.m. to 1 p.m. While it was designed for those who are already eligible for U.S. citizenship rather than as a way to help non-citizens with immigration questions, it helped those completing the application for the first time fill out forms and make sure they have the photographs and identity documents they need. The passport offices in New Orleans where one would normally have to bring already-completed forms have also been dealing with lines and would require one to book spots weeks in advance.

These are the countries with the highest-ranking passports in 2024

According to Carter Sr.'s communications team, those who submitted their passport application at the event also received expedited processing of two to three weeks (according to the State Department's website, times for regular processing are currently six to eight weeks).

While Carter Sr.'s office has not released the numbers of people who applied for a passport on March 14, photos from the event show that many took advantage of the opportunity to apply for a passport in a group setting and get expedited processing.

Every couple of months, a new ranking agency puts together a list of the most and least powerful passports in the world based on factors such as visa-free travel and opportunities for cross-border business.

In January, global citizenship and financial advisory firm Arton Capital identified United Arab Emirates as having the most powerful passport in 2024. While the United States topped the list of one such ranking in 2014, worsening relations with a number of countries as well as stricter immigration rules even as other countries have taken strides to create opportunities for investors and digital nomads caused the American passport to slip in recent years.

A UAE passport grants holders visa-free or visa-on-arrival access to 180 of the world’s 198 countries (this calculation includes disputed territories such as Kosovo and Western Sahara) while Americans currently have the same access to 151 countries.

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Fast-food chain closes restaurants after Chapter 11 bankruptcy

Several major fast-food chains recently have struggled to keep restaurants open.

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Competition in the fast-food space has been brutal as operators deal with inflation, consumers who are worried about the economy and their jobs and, in recent months, the falling cost of eating at home. 

Add in that many fast-food chains took on more debt during the covid pandemic and that labor costs are rising, and you have a perfect storm of problems. 

It's a situation where Restaurant Brands International (QSR) has suffered as much as any company.  

Related: Wendy's menu drops a fan favorite item, adds something new

Three major Burger King franchise operators filed for bankruptcy in 2023, and the chain saw hundreds of stores close. It also saw multiple Popeyes franchisees move into bankruptcy, with dozens of locations closing.

RBI also stepped in and purchased one of its key franchisees.

"Carrols is the largest Burger King franchisee in the United States today, operating 1,022 Burger King restaurants in 23 states that generated approximately $1.8 billion of system sales during the 12 months ended Sept. 30, 2023," RBI said in a news release. Carrols also owns and operates 60 Popeyes restaurants in six states." 

The multichain company made the move after two of its large franchisees, Premier Kings and Meridian, saw multiple locations not purchased when they reached auction after Chapter 11 bankruptcy filings. In that case, RBI bought select locations but allowed others to close.

Burger King lost hundreds of restaurants in 2023.

Image source: Chen Jianli/Xinhua via Getty

Another fast-food chain faces bankruptcy problems

Bojangles may not be as big a name as Burger King or Popeye's, but it's a popular chain with more than 800 restaurants in eight states.

"Bojangles is a Carolina-born restaurant chain specializing in craveable Southern chicken, biscuits and tea made fresh daily from real recipes, and with a friendly smile," the chain says on its website. "Founded in 1977 as a single location in Charlotte, our beloved brand continues to grow nationwide."

Like RBI, Bojangles uses a franchise model, which makes it dependent on the financial health of its operators. The company ultimately saw all its Maryland locations close due to the financial situation of one of its franchisees.

Unlike. RBI, Bojangles is not public — it was taken private by Durational Capital Management LP and Jordan Co. in 2018 — which means the company does not disclose its financial information to the public. 

That makes it hard to know whether overall softness for the brand contributed to the chain seeing its five Maryland locations after a Chapter 11 bankruptcy filing.

Bojangles has a messy bankruptcy situation

Even though the locations still appear on the Bojangles website, they have been shuttered since late 2023. The locations were operated by Salim Kakakhail and Yavir Akbar Durranni. The partners operated under a variety of LLCs, including ABS Network, according to local news channel WUSA9

The station reported that the owners face a state investigation over complaints of wage theft and fraudulent W2s. In November Durranni and ABS Network filed for bankruptcy in New Jersey, WUSA9 reported.

"Not only do former employees say these men owe them money, WUSA9 learned the former owners owe the state, too, and have over $69,000 in back property taxes."

Former employees also say that the restaurant would regularly purchase fried chicken from Popeyes and Safeway when it ran out in their stores, the station reported. 

Bojangles sent the station a comment on the situation.

"The franchisee is no longer in the Bojangles system," the company said. "However, it is important to note in your coverage that franchisees are independent business owners who are licensed to operate a brand but have autonomy over many aspects of their business, including hiring employees and payroll responsibilities."

Kakakhail and Durranni did not respond to multiple requests for comment from WUSA9.

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Industrial Production Increased 0.1% in February

From the Fed: Industrial Production and Capacity Utilization
Industrial production edged up 0.1 percent in February after declining 0.5 percent in January. In February, the output of manufacturing rose 0.8 percent and the index for mining climbed 2.2 p…

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From the Fed: Industrial Production and Capacity Utilization
Industrial production edged up 0.1 percent in February after declining 0.5 percent in January. In February, the output of manufacturing rose 0.8 percent and the index for mining climbed 2.2 percent. Both gains partly reflected recoveries from weather-related declines in January. The index for utilities fell 7.5 percent in February because of warmer-than-typical temperatures. At 102.3 percent of its 2017 average, total industrial production in February was 0.2 percent below its year-earlier level. Capacity utilization for the industrial sector remained at 78.3 percent in February, a rate that is 1.3 percentage points below its long-run (1972–2023) average.
emphasis added
Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and above the level in February 2020 (pre-pandemic).

Capacity utilization at 78.3% is 1.3% below the average from 1972 to 2022.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.


Industrial Production The second graph shows industrial production since 1967.

Industrial production increased to 102.3. This is above the pre-pandemic level.

Industrial production was above consensus expectations.

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