Weeks After ‘Bear Trap,’ Bitcoin Nears Golden Cross While U.S. Debt Concerns Intensify

Bitcoin Nears Bullish Golden Cross Amid Moody’s U.S. Debt Downgrade

Bitcoin (BTC) is approaching a critical technical milestone—a golden cross—just as Moody’s downgrades the U.S. credit rating, fueling concerns about the nation’s mounting debt.

According to data from TradingView, BTC’s 50-day simple moving average (SMA) is set to cross above its 200-day SMA in the coming days, signaling a potential shift to a sustained bullish trend. This pattern, historically a positive indicator, preceded Bitcoin’s dramatic rally from $70,000 to $100,000 in late 2024, a period marked by rising worries over U.S. fiscal health.

The impending golden cross arrives weeks after a death cross appeared—a signal often seen as bearish—that in hindsight acted as a bear trap, misleading short sellers. A similar sequence unfolded last year, when the death cross in August 2024 gave way to a powerful rebound, culminating in Bitcoin breaking the $70,000 barrier by November and hitting all-time highs above $109,000 by January.

BTC’s price had bottomed near $50,000 as the 50-day SMA dipped below the 200-day SMA, but the subsequent golden cross initiated a strong upward trend. Now, a comparable technical setup is taking shape, suggesting that Bitcoin may be poised for another bullish phase once the golden cross confirms.

While technical analysis is not infallible, this positive pattern aligns with broader macroeconomic concerns that support Bitcoin’s role as a hedge against traditional financial risks.

Moody’s Downgrade Highlights U.S. Fiscal Challenges

On Friday, Moody’s Investors Service downgraded the U.S. sovereign credit rating from “Aaa” to “Aa1,” citing the rapidly growing national debt, which has surpassed $36 trillion. This downgrade reflects increasing skepticism about the long-term sustainability of U.S. fiscal policy.

The bond market has been pricing in these risks for some time, as evidenced by elevated Treasury yields that suggest a growing sovereign risk premium. Such conditions have historically been bullish for Bitcoin, as investors seek alternative assets amid uncertainty in traditional markets.