Bitcoin (BTC) rebounding is now “highly probable” as recent price action set fresh bearish records.
Key points:
– Bitcoin has never traded so far below its 200-day moving average, data shows.
– BTC price action is due for “mean reversion.”
– Analysis describes a “macro-driven” Bitcoin bear market now in progress.
Bitcoin sees one of its fastest price drawdowns
New analysis from Martin Leinweber, director of digital asset research and strategy at MarketVector Indexes, says Bitcoin’s long-term investment thesis remains “intact.” BTC has never been this far below its 200-day simple moving average (SMA); the dip below $60,000 is highly abnormal.
“Bitcoin is -2.88σ below its 200-day moving average. In 10 years of data, this has literally NEVER happened before. Not during COVID. Not during FTX. Never,” Leinweber wrote on X. This week’s crash ranks among Bitcoin’s 15 fastest, with BTC/USD falling more than 22% in a single week — a worse rate than 98.9% of its history.
“When you’re in the 99th percentile of bad outcomes, mean reversion becomes highly probable,” he added. At 2.88 standard deviations below the 200-day SMA, Bitcoin has exceeded drawdowns seen in major altcoins such as Ether and Solana. “We’re not at generational lows yet. But we ARE at statistical extremes across multiple indicators,” the analysis said.
Leinweber cautioned that the current floor might be a local one rather than a definitive long-term bottom, but maintained: “Bear market = macro driven, not tech failure. Long-term thesis intact.”
Bitcoin dip-buying needs “patience”
Cointelegraph previously noted the record-breaking nature of recent BTC losses. Thursday produced Bitcoin’s first-ever $10,000 red daily candle, with liquidations surpassing major prior events including the COVID-19 crash and the FTX collapse. Market sentiment plunged to extreme lows, with the Crypto Fear & Greed Index falling to 9/100.
At the same time, signs of dip-buying emerged, focused on large-volume players including hedge funds and Binance. Trader Daan Crypto Trades highlighted the opportunity after substantial liquidations: “$BTC Bouncing from the middle of the 2024 range. Price sold off -38% in just a few weeks and a lot of large leveraged positions have been wiped out.” He added: “Great time if you are more cash heavy and have the patience to accumulate or profit from the volatility.”
While the sell-off has been unusually severe, the combination of extreme statistical divergence from the 200-day SMA, macro-driven bearish forces, and signs of institutional buying frames the current phase as one where mean reversion is likely but timing and the depth of a final bottom remain uncertain.
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