Galaxy Research says Bitcoin's reclaim of its 50-week moving average has preceded the end of nearly every prior bear market since 2011. Bitcoin currently trades at $78,114, still about 6.4% below that average, leaving the signal unconfirmed for now.
Bitcoin needs to close a week above its 50-week moving average before its current rebound can be called a confirmed bull market, according to a Galaxy Research analysis. The firm tested every completed Bitcoin bear market since 2011, using a rule of at least a 50% drawdown lasting 90 days or more, and found the moving-average reclaim has historically marked the bottom.
The gap to the key average
The cryptocurrency now trades at $78,114. That is more than 32% above its June 30th low. The 50-week moving average sits at $82,470. Bitcoin remains about 6.4% below it, meaning the trigger Galaxy Research points to has not yet fired.
A signal with a strong track record
Galaxy Research found 11 of 13 reclaims of the 50-week average during completed bear markets marked the low. Only two failed, both during the 2021-22 period, before Bitcoin dropped to $15,758. By contrast, the faster 50-day average proved far noisier: 43 of 106 reclaims failed and led to new lows.
According to Galaxy Research: "history suggests the bear market would likely be over." Even successful 50-week signals can whipsaw afterward, the firm notes that Bitcoin never printed a new bear-market low once the average had been reclaimed.
Past reclaims held despite volatility
The May 2019 reclaim gave way to crossings around the COVID crash, but Bitcoin never made a new 2017-18 bear-market low. The May 2020 reclaim then held for 427 days. Until Bitcoin closes a week above $82,470, Galaxy Research treats the current daily strength as encouraging but not conclusive.
Source: The Daily Hodl
Trading involves risk.
Risk Disclaimer
