A lagging indicator has turned bearish for the first time in four years, suggesting bitcoin's price may have bottomed out and that a new bull run could begin this year.
As of press time, bitcoin's 50-week moving average has dropped below the 100-week MA, confirming a bearish crossover - the first since April 2015.
Long-term bearish crossovers tend to occur at the end of a big bear move, with prices rallying soon after, as MAs are based on past data.
The 50-week MA responds to price action seen over the last 12 months, and the 100-week MA tracks much older data.
The bearish cross of the two is the product of a prolonged bear market - BTC dropped from $20,000 to $3,122 in the 12 months ending December 2018.
Further, bitcoin's historical data shows the previous bear market ended with the 50-week MA falling below the 100-week MA in April 2015.
As seen above, the 50-week MA fell below the 100-week MA in April 2015 - three months after the bear market stalled at lows near $150. The cryptocurrency spent the following five months consolidating in a range of $200-$300 before breaking higher into a fresh bull market in October 2015.
The latest bearish crossover has happened nearly three months after the sell-off from December 2017 highs ran out of steam near $3,100.
The relative strength index has breached the falling trendline, warning the bear cross could trap sellers on the wrong side of the market.
There is a strong possibility that BTC will begin a new bull run later this year by violating the bearish lower highs pattern, as represented by the trendline sloping downwards from December 2017 highs.
Long-Term Bitcoin Price Indicator Turns Bearish, Suggesting Bottom May Be In
Published on Feb 25, 2019
by Coindesk | Published on Coinage
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