Bitcoin Breaks Long-Term Average After 45 Weeks: No New Bottom in 11 Out of 13 Instances
Bitcoin closed the week ending September 20 above the 50-week moving average for the first time in 45 weeks.
Bitcoin strengthened its recovery in recent weeks by crossing a significant threshold monitored for long-term trends. Alex Thorn, Head of Galaxy Research, evaluated this close as a potential confirmation that the bear market may have ended and a new uptrend could have begun.
Bitcoin rose approximately 6 percent throughout the week, bringing its recovery over the last 35 days to 29 percent. According to current metrics in the source, Bitcoin is at approximately $81,450, while the 50-week moving average stands at $78,115. A weekly close above the average is considered a stronger signal than the price briefly exceeding this level intraday.
Why is Bitcoin’s 50-week average important?
The 50-week moving average shows the average of Bitcoin’s weekly closing prices over approximately the past year. This level is used to track the direction of the long-term trend. While Bitcoin generally stays above this line during bullish periods, attempts to cross the average often fail during prolonged declines.
By examining major declines since 2011, Galaxy Research identified 13 instances where Bitcoin reclaimed this average with a weekly close. In 11 of these instances, Bitcoin did not subsequently form a new bottom. Two unsuccessful examples occurred during the volatile period between late 2021 and early 2022.
Past successful reversals also revealed the scale of the rallies. After reclaiming the average following the 2011 crash, Bitcoin rose approximately 600x; after the 2014-2015 bear market, it rose about 100x; and after the 2018 crash, it increased roughly 22x. It also recorded an increase of approximately 8x following the recovery in March 2023.
This historical pattern suggests the possibility that the recent close may have established a bottom for Bitcoin around $60,000. However, for the current signal to gain strength, it will depend on Bitcoin remaining above the 50-week average in the coming weeks.