A Simple Bitcoin Indicator Has Successfully Predicted Every Bear Market Bottom Since 2015, But Remains Inactive

Notably, beneath the daily price fluctuations, social media chatter, and macroeconomic headlines, a remarkably straightforward indicator has quietly and accurately predicted every major bitcoin market bottom since 2015. Unfortunately for bullish investors, this signal has not been triggered yet, implying that the broader bear market may not have reached its conclusion, and the recent price rebound to $75,000 from $65,000 could be a short-lived recovery. This indicator is based on two simple moving averages on the price chart, representing bitcoin's average price over the past 50 and 100 weeks, which typically show near-term and long-term trends in bitcoin's price. When the 50-week average falls below the 100-week average, it is known as a bear market signal, which has occurred three times in bitcoin's history, coinciding with the end of a bear market and marking major price bottoms that have not been revisited since. These crossovers have acted as a contrary indicator, signaling the end of downturns rather than their continuation. Looking at the chart, the vertical lines mark the three bearish crossovers – April 2015, February 2019, and September 2022 – each occurring near the bottoming phase, but not precisely at the lowest point. Following each crossover, bitcoin experienced significant rallies, with the 2015 crossover preceding a rally from $200 to nearly $20,000 by the end of 2017, and the 2019 crossover preceding a similar pattern. The 2022 crypto winter, marked by several bankruptcies and scams, saw investor confidence shattered, but the downtrend lost momentum after the crossover in September, with bitcoin bottoming out in the final months and later rallying to $126,000 by October 2020. Each of these bull runs delivered returns far exceeding those of equities and other major asset classes. As of April 17, the crossover has not occurred, with bitcoin declining sharply from its October record high of over $126,000 to around $75,000, briefly reaching $60,000 in early February. Consequently, the two averages are moving closer together, but the 50-week average still remains above the 100-week average. The implication is that, if historical patterns are any guide, the broader bear market may still be intact and could worsen before finding a bottom, and the recent bounce toward $75,000 is likely a temporary recovery rather than the start of a full-fledged bull market. However, historical patterns do not guarantee future outcomes, and if U.S. equities continue to advance, institutional demand for Bitcoin ETFs could strengthen, potentially supporting a price rally.