History seems to be repeated in the bitcoin market, as the upward turn of a key indicator could mark the beginning of the next meteoric price recovery.
According to Bitstamp data, the price action of the world’s most valuable cryptocurrency seen in the last eight months is very similar to the movements seen in 2015. For example, the bitcoin bear market ended near $ 3,100 in mid-December of 2018 and prices built a base below $ 4,000 in the next three months before entering a bull market on April 2.
In particular, the downturn in the bear market was exhausted two months before the 50 and 10 week moving averages confirmed a bearish crossover (in February 2019).
In addition, the new bull market began two months after the confirmation of the bear crossover. That is not surprising, since long-term bearish crossovers are lagging indicators and often mark the bottoms of the bear market.
What is more interesting is that the previous bear market (2014) had also run out in the period prior to the bear crossover and the crossover confirmation was followed by a bullish break, as seen in the chart below.
The bear market, which began at the end of 2013, sold out to a minimum of about $ 150 in January 2015. The 50- and 100-week AM produced a bearish crossing in April and an upside reversal was confirmed at the end of October. 2015
Keep in mind that the bull market had stagnated around $ 450 after a rapid increase from $ 320 to $ 500 in November.
The cryptocurrency resumed the bull market in the last week of May 2016 after prices increased by 18 percent and the AM of 50 and 100 weeks produced a bullish cross.
More importantly, BTC reached new records above $ 1,200 in February 2017.
As of now, BTC is trading around $ 10,300, having risen from $ 4,000 to $ 13,880 in the second quarter. Essentially, the bull market has stagnated in recent weeks.
With history repeating itself, there is a strong reason to believe that the upward crossing of the 50 and 100 week AM, if and when, confirmed, could mark the beginning of a meteoric rise well above $ 20,000.
Currently, the 50 and 100 week AM are located at $ 6,556 and $ 7,668, respectively.
Disclosure: the author has no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View