Bitcoin has recently flirted with a level that historically has proven to be a near-perfect entry point for bulls, generating nice returns, crypto exchange Kraken’s chief economist Thomas Perfumo told CoinDesk.
This level is the 200-week simple moving average (SMA), which represents the token’s average price over that period, giving traders a clear view of the long-term trend while cutting through daily noise.
Twice in the last two weeks, BTC briefly dipped below its 200-week SMA before climbing back above it at the end of each week. At the time of writing, bitcoin is trading at $63,900, just above the 200-week SMA of $62,358.
That’s notable because closes below this level have been rare, occurring on only about 10% of trading days since mid-2017, according to Perfumo, and have historically marked unusually attractive entry points for buyers.
“Historically, buyers at this level have continued to see median returns north of 113% over the following year and 313% over two years,” Perfumo said in an email.
