Many investors are adopting a cautious stance towards bitcoin, interpreting current market conditions as indicative of a nearing end to the existing cycle. Speculation about a potential conclusion to the market phase is particularly pronounced as attention turns to the fourth quarter. However, two significant indicators suggest that the bull market might still be in its nascent stages.
Recent data from Glassnode reveals that the 200-week moving average (200WMA)—a crucial metric that smooths out bitcoin’s price fluctuations over an extended period—has recently surpassed $53,000. This upward movement is consistent with historical trends, as the 200WMA has historically shown an upward trajectory.
In conjunction with this, the realized price, which represents the average price at which all bitcoin currently in circulation last changed hands on the blockchain, has crossed above the 200WMA, now sitting at $54,000. This convergence of metrics presents a compelling narrative for those interpreting the market through a bullish lens.
Analysis of past market cycles demonstrates a clear pattern: during bull markets, the realized price typically remains consistently above the 200WMA, while in bear markets, it often drops below this threshold. For instance, in the bull runs of 2017 and 2021, the realized price exhibited a steady ascent, increasing the gap above the 200-WMA before an eventual decline that marked the onset of bearish conditions. Conversely, during the downturn observed in 2022, the realized price fell beneath the 200-WMA but has only recently ascended above it again.
Historically, when the realized price stabilizes above the long-term moving average, bitcoin has tended to trend upward, reinforcing the idea that the current market may still be building momentum rather than approaching a terminal phase. Given these historical insights and the current data, there is a growing sentiment that the potential for further price gains may lie ahead, challenging more pessimistic projections from within the investor community.
