History looks to be repeating itself in the bitcoin market, as a key indicator’s bullish turn could mark the beginning of the next meteoric price rally.
The world’s most valuable cryptocurrency’s price action seen over the last eight months is very similar to the moves seen in 2015, according to Bitstamp data. For instance, the bitcoin bear market ended near $3,100 in mid-December 2018 and prices built a base below $4,000 in the following three months before breaking into a bull market on April 2.
Notably, the bear market drop ran out of steam two months before the 50- and 10-week moving averages confirmed a bearish crossover (in February 2019).
Further, the new bull market began two months following the confirmation of the bearish crossover. That is hardly surprising as bearish crossovers of long duration MAs are big-time lagging indicators and often mark bear market bottoms.
What’s more interesting is that the previous bear market (2014) had also run out of steam in the run-up to the bearish crossover and the confirmation of the crossover was followed by a bullish breakout, as seen in the chart below.
Weekly chart
The bear market, which began at the end of 2013, ran out of steam at lows near $150 in January 2015. The 50- and 100-week MAs produced a bearish cross in April and a bullish reversal was confirmed at the end of October 2015.
Note that the bull market had stalled around $450 following a quick rise from $320 to $500 in November.
The cryptocurrency resumed the bull market in the last week of May 2016 after prices rose 18 percent and the 50- and 100-week MAs produced a bullish crossover.
More importantly, BTC went on to hit fresh record highs above $1,200 in February 2017.
As of now, BTC is trading around $10,300, having rallied from $4,000 to $13,880 in the second quarter. Essentially, the bull market has stalled in the last few weeks.
With history repeating itself, there is a strong reason to believe that the bullish crossover of the 50- and 100-week MAs, if and when, confirmed, could mark the beginning of a meteoric rise well above $20,000.
Currently, the 50- and 100-week MAs are located at $6,556 and $7,668, respectively.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
https://www.coindesk.com/bitcoin-price-indicator-may-signal-next-leg-higher
