Bitcoin’s 200-Day Moving Average Hits All-Time High, Bullish Outlook

May. 7, 2024
Bitcoin’s 200-Day Moving Average Hits All-Time High, Bullish Outlook

A key technical indicator traders and analysts use to predict Bitcoin’s long-term price trends has reached an all-time high, suggesting a bullish outlook for the cryptocurrency’s future. Bitcoin’s 200-day moving average, which aims to smooth out short-term price fluctuations by taking the average of the last 200 days’ closing prices, hit $50,178 on May 6th, according to data from BuyBitcoinWorldwide.

This milestone comes as Bitcoin is recovering from a price dip following the latest halving event on April 20th. The network’s block rewards were cut in half from 6.25 to 3.125 BTC per block mined. In the wake of the halving, Bitcoin’s price dropped as low as $56,800 before rebounding.

To calculate the 200-day simple moving average (SMA), sum up the closing prices from the last 200 days and divide the total by 200. When an asset’s price trades above this indicator, traders typically consider it a bullish signal for the long-term trend. Conversely, prices below the 200-day SMA suggest a bearish outlook.

Source: BuyBitcoinWorldwide

Commenting on the 200-day moving average crossing the $50,000 mark for the first time, popular Bitcoin analyst and influencer Anthony Pompliano stated on CNBC, “Over the long run, Bitcoin continues to trend upward even though on a day-to-day basis that price is volatile. “In a social media post, he warned, “Don’t get lulled to sleep by Bitcoin going sideways.” He emphasized that the long-term thesis remains as strong as ever.

Bullish Bitcoin Trends: Analyst Insights & Market Indicators

According to data from analyst Willy Woo’s models on WooCharts, an even longer-term trend indicator – the 200-week moving average – is also at an all-time high above $34,000. This suggests the yearly outlook for Bitcoin is overwhelmingly bullish as well. Bitcoin’s price crossed above this $34,000 level in mid-October 2022 and has remained above it.

Source: WooCharts

Current spot prices are significantly higher than the “realized price” metric of around $29,000. The realized price demonstrates the value of all bitcoins, dividing the price the circulating supply last moved them on-chain. It serves as another long-term price indicator.

While the longer-term moving averages paint an optimistic picture, Bitcoin’s 50-day SMA has dipped from its mid-April peak following the cryptocurrency’s decline from its mid-March all-time high price above $69,000.

Separately, Pompliano noted that the Grayscale Bitcoin spot exchange-traded fund (ETF) saw its first inflow on May 3rd after over $17.5 billion in net outflows since mid-January when the fund converted from the Grayscale Bitcoin Trust to an ETF structure. According to data from Farside Investors, the fund saw another smaller $3.9 million inflow on April 6th.

The recovering prices and positive moving average data suggest that despite the volatility and recent pullback, analysts see Bitcoin’s long-term trajectory as bullish based on these widely followed technical indicators. As the halving schedule continues to constrict new supply, many expect the upward price pressure to remain for the foreseeable future.

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