Bitcoin’s move back above its one-year moving average has attracted attention from technical analysts, but AltcoinPro Research says the more significant test will be whether the cryptocurrency can remain above its 200-day average.
Bitcoin’s recent rally has produced a potentially bullish technical development that could point to further gains. The cryptocurrency moved above its 365-day simple moving average, another key long-term trend indicator.
On Sept. 22, bitcoin climbed above its 365-day average of roughly $80,900 for the first time in 310 days, according to Altcoin Pro founders Ryan Horst and Joni Zhuleku.
Altcoin Pro’s historical analysis found that bitcoin posted gains 12 months later in all five previous cases when it recovered the 365-day average after remaining below the level for at least 90 days. Those gains ranged from approximately 59% to more than 1,400%. The largest increase occurred in 2012, when bitcoin was still a relatively small and emerging asset.
Horst cautioned that the historical pattern does not guarantee another rally. When the analysis included periods of less than 90 days below the moving average, two breakouts failed. Bitcoin dropped about 27% within 90 days of the July 2018 breakout and roughly 59% after the March 2022 move.
“September’s move is encouraging, particularly after 310 days below the average, but we want to see bitcoin maintain the level,” Horst said. “It is a signal, not a guarantee.”
Despite that caveat, Horst and Zhuleku remain positive on bitcoin’s longer-term outlook. They place greater importance on the 200-day moving average than the 365-day measure when assessing the broader trend.
“The 365-day average is only now reflecting what the 200-day average had already indicated in mid-August,” the analysts said.
AltcoinPro’s calculation put bitcoin’s 200-day average at approximately $70,800, leaving the cryptocurrency around 19% above the level before its modest decline over the previous 36 hours. Meanwhile, the 365-day average was still trending lower and remained much closer to bitcoin’s current market price.
Moving averages are backward-looking indicators calculated from historical prices. The 365-day measure reacts more slowly to recent market movements than the 200-day average.
According to Horst and Zhuleku, the difference in reaction time is significant for bitcoin because market trends can develop rapidly. The 365-day average reflects price conditions from further in the past, while the 200-day average responds to changes roughly three months earlier.
Bitcoin also formed a so-called golden cross on Sept. 8, when its 50-day moving average moved above the 200-day average. However, the indicator has produced mixed results historically and has not always preceded sustained rallies, CoinDesk’s Omkar Godbole noted.
AltcoinPro sees the latest golden cross as more constructive because it followed an extended period during which bitcoin traded below its 200-day average rather than appearing near a market top.
The cryptocurrency had remained below the 200-day measure for 293 days before reclaiming it, according to the Altcoin Pro founders. That period was shorter than the approximately 436 days bitcoin spent below the same average during the 2022-23 bear market.
The immediate question now is whether bitcoin’s recent pullback could send it back toward the 200-day average, Horst and Zhuleku said.
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