Benjamin Cowen breaks down what Bitcoin closing below the 200 week moving average for the first time this cycle actually means, and why it has happened before without breaking the four year cycle.
Key Points
Key Highlights:
- This is not new, the last time Bitcoin closed below the 200 week moving average was June 2022, and the cycle still played out on schedule despite FTX, Luna, and Voyager all collapsing that same year
- 2026 is mirroring 2018 almost exactly, both years saw a low in February, a higher low in late March, and then a lower low in June
- Without a major shock like the 2020 pandemic crash that fully reset on chain indicators in one event, time based capitulation matters more than price right now, meaning a final low in Q3 or early Q4 is still the most likely outcome
- The typical pattern is a low forming early in summer, a counter trend rally in mid to late summer, then a final drop into the real market cycle bottom
- Every past bear market ended with a massive spike in trading volume marking capitulation, and that spike simply has not happened yet this cycle
Takeaway Falling below the 200 week moving average looks scary but it is not unprecedented. Unless a major shock forces an early price based capitulation, the most likely path is still a low this summer, a relief rally, and the real bottom later in the year.
