Bitcoin bull market coming? 50 week moving average to bullish signal

What happened?

According to Bitcoin Magazine, the Bitcoin closed a key round this week for the first time in its cycle above the 50-week Simple Moving Average (SMA). Meanwhile, it gained nearly 10% during the week and broke through the $86,000 mark.

This signal is important because the 50-week average has historically been seen as a dividing line between bullish and bearish patterns. Analyst Sean Hagan said on Chart of the Day that he judges with about 80% confidence whether or not the current conversion belongs to a true trend.

The historical significance of the dividing line

Sean Hagan and Grace Remington reviewed the historical performance of this indicator on the show: In the past, when Bitcoin stood steady for 50 weeks above the mean line, it often signaled a market transition from bear market to bull market structure; falling in turn would often signal the opening of bear market .

However, this signal is not 100 percent accurate. It should be noted that there are only two exceptions in the history of Bitcoin where a multi-headed pattern has failed to continue after 50 weeks on average. This reminds investors that a single technical indicator still needs more evidence and comprehensive judgement.

What else is required?

The two analysts mentioned that if the circumscribed line closes above this mean again next week, it will constitute a further confirmation signal. In addition, from a time-cycle perspective, this round's movement almost coincides with the rhythm of the historical window trending from an all-time high to about one year at the bottom of the cycle, which is also one of the reasons why the current signals are being watched.

It should be noted that at the time of writing, this signal is pending further round-trip verification and there are still uncertainties about where the market will go.

Warning signs

The above is for public information only and does not represent any investment advice. crypto asset Prices fluctuate wildly, there is a high risk of participating in the relevant market, please readers do your own research and make careful decisions.

(This article was originally published in Bitcoin Magazine by Patrick Green, and has been edited. The views expressed are those of the show's guests; they do not constitute investment, legal or tax advice.)