Bitcoin prices started this week at unprecedented highs for many market participants. After disappointing investors in early October, Bitcoin prices have climbed above $66,000 for the first time in weeks.
Interestingly, this price move has Bitcoin price once again approaching the key technical level of the 200-day moving average. Historically, crossing this important indicator has started an explosive bull market, often resulting in parabolic price increases. The question now is whether Bitcoin can repeat this historical pattern and cause another massive rally.
Bitcoin price approaches 200MA. What does this mean?
The 200-day moving average provides a clear picture of long-term assets. The break above the 200-day moving average suggests that the cryptocurrency is currently trading with a positive differential compared to the 200-day average. For Bitcoin in particular, this indicator often acts as a tipping point between bullish and bearish sentiment for the price.
Cryptocurrency analyst Ali Martinez pointed out that the price of Bitcoin above its 200-day moving average has consistently signaled the beginning of a parabolic bull market. Each of the past three times that Bitcoin’s price exceeded its 200-day moving average started a parabolic bull market. The first time was in 2016, when Bitcoin rose 7,513% and lasted almost two years.
Again, in 2021, Bitcoin price exceeded its 200-day moving average for the second time, leading to a 705% price increase that peaked in April 2021. Recently, in 2023, Bitcoin price exceeded the 200 MA for the third time. Time passed, causing further significant price increases. This time, Bitcoin has risen 275% from its breakout level.
These previous examples illustrate the importance of the 200-day moving average in bullish price action. Recent price movements have once again pushed Bitcoin price slightly above its 200-day moving average, currently sitting near $65,844. As a result, this price point is currently of great interest to both bullish and bearish traders.
Source:X
What’s next for BTC price?
Bitcoin price rose to $66,000 in the past 24 hours, but has pulled back a bit and is now trading just below it. A reconfirmation of $66,000 could eventually lead to a breakout of the 200-day moving average and the start of another bull run.
As Bitcoin looks to break through this important level, all eyes will be on whether it can repeat the parabolic movements seen in previous cycles. However, each of the past three breakouts has shortened the price return time.
Nevertheless, even with a 100%-150% return, the target price would be between $132,000 and $165,000 from the current price. With increasing institutional inflows, especially through spot Bitcoin ETFs, Bitcoin could easily break above the 200-day moving average and reach these price ranges soon.
BTC price stabilizes above $65,000 | Source: BTCUSD on Tradingview.com
Featured image created by Dall.E, Charts from Tradingview.com
