Bitcoin (BTC) continues to show promising signs of growth as historical trends tied to a key indicator suggest that there is still plenty of upside potential. The 200-week simple moving average (SMA) of bitcoin’s price, which currently stands at $44,200, indicates that the cryptocurrency is on an upward trajectory. Despite reaching its highest point ever, the current average is still below the peak of the previous bull market in November 2021, which hit $69,000.
Past data reveals that bull markets typically end with the 200-week SMA reaching record prices established in previous bull runs. For example, the bull market in late 2021 concluded with the 200-week SMA hitting $19,000, the peak of the 2017 bull market. Similarly, the 2017 bull market ended with the SMA reaching over $1,200, the record price set four years ago. This pattern suggests that if history repeats itself, bitcoin’s current price range between $90,000 and $110,000 is likely to see a bullish resolution, indicating further upward movement.
The pricing of options on Deribit also supports this positive outlook. Data from Amberdata shows that call options, which indicate a market expectation of rising prices, are more expensive than put options for expirations of three months or longer. Additionally, most open interest is concentrated in call options at strikes higher than BTC’s current market price of $96,700. The $120K strike call option is particularly popular, with a notional open interest of over $1.8 billion, reflecting strong bullish sentiment among traders.
In conclusion, the combination of the 200-week SMA trend and the pricing of options on Deribit suggests that bitcoin still has room for growth. As inflation concerns in the U.S. continue to rise, investors may turn to bitcoin as a hedge against devaluation of traditional currencies. With bullish expectations for the cryptocurrency’s future, it is likely that bitcoin will continue its upward trajectory in the coming months.
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