Bitcoins rally has lost momentum since June, leaving prices largely above $100,000. This has encouraged some analysts who believe in the traditional four-year bitcoin cycle, and are warning that a severe bear market may be on the way.
However, one longer-term indicator offers a glimmer of hope for bulls – the 200-week simple moving average (SMA), currently around $54,750, which is still well below BTC’s 2021 cycle peak of around $70,000, according to data source TradingView.
Now you may be wondering why this matters. Well, that’s because past bull markets have tended to end when the 200-week SMA climbs up to meet or challenge the previous cycle’s top price. This happened at the end of 2017 and the end of 2021-beginning of 2022.
Right now, with the 200-week SMA still well below the 2021 price peak, the historical pattern suggests that bitcoin may still be in its broader bull market phase despite recent short-term weakness.
As exciting as this “hopium” is for the bulls, it’s important to remember that it has only played out twice in bitcoin’s relatively short decade-long history, and in years when institutional participation was extremely low.
Therefore, drawing firm conclusions based solely on this data may seem limited, especially in the eyes of stock investors who rely on decades of market data to identify consistent patterns.
