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Since mid-August, the price of Bitcoin has increased by 25%, returning to the $80k mark. However, experts at Galaxy Research believe that to confirm a trend change, the "bulls" need to overcome another price level — a mark slightly above $81k.
From August 17th, the price of Bitcoin (BTC) began a rapid rise from $63k and by August 25th exceeded $81.3k per coin, after which it corrected, dropping by a few percent. This is exactly where the 50-week Simple Moving Average (SMA) lies. Historically, Bitcoin's price has not passed this level quickly.
"In 11 out of 13 instances when the Bitcoin price returned above the 50-week SMA during completed bear markets, the bottom had been passed. If the Bitcoin price closes the week above it [the 50-week SMA], history suggests the bear market is most likely over," states the Galaxy Research report cited by CoinDesk.
Analysts note that moving averages are one of the most popular technical analysis tools monitored by traders worldwide. Since a large number of market participants focus on the same levels, they often become self-fulfilling prophecies, turning into real support and resistance levels.
The current rise in Bitcoin is an "extremely breakout move in Bitcoin," noted Dan Tapiero, founder of 50T Funds (a multi-billion dollar investment fund investing in late-stage companies in the digital asset sector).
Tapiero added that the cycle bottom has already formed and "the most difficult thing here is to buy" if investors still do not have a position for Bitcoin growth. The most difficult market situation will arise when the price of Bitcoin rises rapidly towards $100k. As of 4:00 PM Moscow time on August 25th, the Bitcoin price is just above $79k.
When Will Growth Begin
In previous growth cycles, the 50-week SMA acted as resistance for about two months in early 2023, when the Bitcoin price managed to break above it, rising above $25k per coin. Before that, in spring 2020, breaking through this line took about two weeks, after which Bitcoin traded near it for another two months — around the $9k level.
Although past experience does not guarantee the price will move according to the same scenario, there has been no period in Bitcoin's history when the price passed this particular level faster than a few weeks.
At the same time, the macroeconomic backdrop remains ambiguous. Despite many months of expectations, the US monetary authorities have still not lowered the credit rate, which investors perceive as a factor improving the global economic situation. And the US Treasury announced plans to double the amount of its own debt buybacks to $4 billion per operation.
Importantly, the Treasury's statement came against the backdrop of rising long-term bond yields to their highest levels since 2007, putting pressure on risk assets, including cryptocurrencies. This also does not indicate an improvement in the economic situation.
Many experts also believe that "few people now expect the explosive rally to continue." They point out that last week's price spike was largely driven by technical factors, such as high leverage in traders' positions. Further growth will depend on the sustainability of institutional demand for Bitcoin from exchange-traded funds (ETFs).
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