Bitcoin Charts First Weekly Golden Cross in 3.5 Years

Bitcoin's weekly chart is reporting a bullish golden cross of the 50- and 100-period moving averages.

The cryptocurrency risks falling to key support at $7,087, having faced rejection at bearish weekly average resistance during the Asian trading hours.

Bitcoin's longer duration chart is flashing a specific bull market signal for the first time in over three years.

On the weekly chart, the cryptocurrency's 50-period moving average has crossed above the 100-period moving average, confirming what is popularly known as a "Golden crossover." The same cross was last observed in May 2016, according to Bitstamp data.

A golden cross occurs when a short-term moving average breaks above a long-term moving average on a specific time frame and is considered an advanced warning of an impending bull run.

As can be seen, bitcoin rallied more than 150 percent from $198 to $502 in the 11 weeks to Nov. 8, 2015, and then consolidated largely in the range of $360 to $470 before beginning the next leg higher with the confirmation of the crossover in May 2016.The cross likely attracted buyers, as the preceding structure was positive - higher low and consolidation.

Further, the bull cross happened three months ahead of the reward halving, which took place in August 2016.

By June 20, bitcoin had rallied by more than 120 percent to highs above $775.The latest bull cross comes five months ahead of the next reward halving, due in May 2020.

The preceding market structure is bearish: the cryptocurrency is trapped in a four-month falling channel and the bull cross is mainly the result of the sharp rally from $4,000 to $13,880 seen from April to June.All in all, adopting a strong bullish stance on the back of the golden crossover could prove costly.

The outlook as per the weekly chart would turn bullish if and when the four-month falling channel is breached to the higher side.