Bitcoin's recent climb above its one-year average has caught the attention of market analysts. AltcoinPro Research emphasizes that the critical factor is whether it can maintain its position above the 200-day average.
By Olivier Acuna|Edited by Omkar Godbole, Stephen Alpher13 minutes ago2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Bitcoin experienced a 3% drop from Wednesday to Friday, nearing $82,900, before regaining traction. (CoinDesk)SummaryShow- Bitcoin has recently surpassed its 365-day moving average after spending 310 days below it, a signal that historically precedes gains in five similar instances, although it has also seen failed breakouts under certain conditions.
- AltcoinPro analysts remain optimistic as long as Bitcoin stays above its 200-day moving average, but they caution that moving average signals do not guarantee future performance.
This signal is characterized by Bitcoin exceeding its 365-day rolling simple moving average.
On September 22, Bitcoin climbed above its 365-day average close to $80,900 for the first time in 310 days, according to Ryan Horst and Joni Zhuleku, founders of Altcoin Pro.
Altcoin Pro discovered that Bitcoin was priced higher 12 months later in each of the preceding five occurrences when it regained its 365-day average after being below it for at least 90 days. The increases varied from roughly 59% to over 1,400%, with the most significant rise occurring in 2012 when Bitcoin was not widely recognized.
However, Horst pointed out that this pattern is not infallible. When considering shorter durations below the average, they identified two failed breakouts in July 2018 and March 2022, during which Bitcoin dropped approximately 27% and 59%, respectively, within 90 days.
“This September’s movement is promising, especially after 310 days below the average, but we need to see it maintain this position,” Horst remarked. “It is a signal, not a guarantee.”
Both remain optimistic about Bitcoin's long-term prospects, although their outlook relies more on Bitcoin trading above the 200-day average than the 365-day average.
“The 365-day average is still catching up to what the 200-day average indicated back in mid-August,” they noted. The 200-day average is calculated to be around $70,800, with Bitcoin trading approximately 19% above it before the recent minor decline of the past 36 hours. In contrast, the 365-day average continues to decline and is much closer to the current market price.
Moving averages reflect historical prices, indicating how an asset has performed over a specific period rather than predicting future movements. A 365-day average reacts more slowly to recent market shifts compared to a 200-day average.
“The 365-day average shows where Bitcoin was six months ago,” Ryan and Joni Zhuleku explained. “The 200-day average provides insights from roughly three months earlier. In a rapidly changing market, three months can represent the entirety of a trade.”
On September 8, Bitcoin’s 50-day average crossed above its 200-day average, creating what is known as a golden cross. This indicator has had a mixed history as a standalone predictor, with several past crosses failing to lead to sustained upward movements, according to CoinDesk’s Omkar Godbole.
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Crypto Daybook Americas - The latest moves in crypto markets, in contextMarket analysis for crypto traders and investors.PreviewSign upBy signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy.AltcoinPro posited that this golden cross appears more promising as it follows a prolonged period below the 200-day average, rather than near a market peak. Bitcoin had spent 293 days below that threshold before climbing back above it, the founders noted, which is shorter than the roughly 436 days it was below during the 2022-23 bear market.
The forthcoming challenge is whether the recent selloff will drive Bitcoin back toward the 200-day level, according to Horst and Zhuleku.