Bitcoin’s price has cleared a key hurdle that has historically preceded major bull runs

Bitcoin's price has topped its 50-week average for the first time in 45 weeks, a major bullish signal.

The final barrier standing between bitcoin BTC$81,336.31 and a potentially broader recovery has fallen.

Bitcoin closed the week ended Sept. 20 above its 50-week moving average for the first time in 45 weeks, marking what Galaxy Research’s Head Alex Thorn described as a potentially important confirmation that the market’s bear phase may have run its course and a new uptrend is upon us.

The cryptocurrency rose nearly 6% during the week and was trading around $81,000, extending its rebound to 29% over the past 35 days. The move pushed Bitcoin’s weekly candlestick – the graphical representation of a week’s price action – above the 50-week average, rather than merely testing it.

Bitcoin trades around the clock, but its weekly candle closes at 23:59 UTC on Sunday, with a new candle opening immediately afterward. Analysts typically place more weight on the weekly or daily candles above a major moving average than on a brief move through it.

The 50-week moving average is simply the average weekly closing price over roughly the past year. In market analysis, it is often used as a proxy for Bitcoin’s long-term trend.

During healthy advances, bitcoin tends to trade above the line. During prolonged declines, rallies often fail below it.

Galaxy has described the average as a kind of ceiling during major bitcoin drawdowns. Once the cryptocurrency falls below it, attempts to reclaim the level have historically failed until the market is closer to a durable low.

At the same, successful breakouts have marked an end of bear markets and paved the way for pronounced bull runs.

Galaxy examined major Bitcoin slumps since 2011 and found that Bitcoin closed a week back above its 50-week moving average 13 times. In 11 of those instances, the market did not go on to set a new low, suggesting the worst of the decline had already passed.

These multiples are approximate, given that early BTC price data is inconsistent. So they’re meant to illustrate the scale of subsequent rallies, do not necessarily imply that the moving-average crossover alone caused them.

Past performance does not guarantee future results, and the 50-week average has had its share of misses.

Two of the 13 instances failed. Both occurred during the volatile period spanning late 2021 and early 2022, when bitcoin briefly moved above the average before rolling over and eventually falling toward $16,000. Galaxy identifies those failed reclaims as the Dec. 26, 2021, and March 27, 2022, crossovers.

As of this writing, bitcoin is trading near $81,450, with the 50-week average at $78,115, according to data source CoinDesk.

If history is a guide, the latest reclaim suggests the bear-market low may have been established near $60,000 in recent months. It also raises the possibility that bitcoin could continue advancing toward new highs.

That outcome, however, will depend on whether bitcoin can hold above the moving average in the weeks ahead.

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