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Renowned trader Peter Brandt recently made a controversial statement about the widely known technical analysis pattern called the golden cross. According to him, it is an overhyped phenomenon with no real predictive utility on the market. This has led to many questioning the validity of the golden cross, a pattern that has been utilized on financial markets for decades.
A golden cross occurs when a shorter-term moving average, such as the 50-day moving average, crosses above a longer-term moving average, such as the 200-day moving average. This is viewed as a bullish signal, indicating that the stock or asset's price is likely to continue on an upward trajectory.
A Golden Cross is a fun talking point & nothing more. No real mkt predictive utility. Peer-reviewed and trader-tested research testify that there is nothing magic about the chart construction. pic.twitter.com/GBbBuFWExK
— Peter Brandt (@PeterLBrandt) February 15, 2023
On the cryptocurrency market, several popular tokens, such as Shiba Inu, Ethereum and others, have recently delivered the golden cross signal. However, their price performance was not significantly impacted by the pattern, and they continued to move based on other fundamental and technical factors.
Peter Brandt, who has over four decades of experience in trading and is regarded as an expert in technical analysis, argues that the golden cross has no real market predictive utility. He states that "peer-reviewed and trader-tested research" testifies that there is nothing "magic" about the chart construction.
Brandt is not alone in his skepticism about the golden cross. Many other traders and analysts have pointed out that the pattern's usefulness has been overstated, and its predictive power is minimal. They argue that relying solely on technical indicators, like the golden cross can be dangerous and may lead to missed opportunities or false signals.
While the golden cross may be useful as one tool in a trader's arsenal, it is essential to consider other factors, such as market sentiment, news and economic indicators. Trading solely based on technical analysis patterns is often not enough to make accurate market predictions.
Godfrey Benjamin
Yuri Molchan
