Bitcoin’s ongoing bull cycle appears a long way off from ending, with historical trends in the currency’s price as well as larger technical indicators all suggesting more to the upside. One of the most important gauges, the 200-week simple moving average (SMA), is showing that BTC’s current price area of between $90,000 and $110,000 will resolve to the upside.
Main Points:
Bitcoin’s 200-week SMA is far down from its cycle high in 2021, and this upholds the promise of further price growth.
History indicates bull runs come to a conclusion when the 200-week SMA reaches near the last cycle’s top price.
Options data also makes the case for bullishness, and this includes the high concentration of open interest on higher-strike calls.
BTC’s 200-Week SMA Suggests Further Upside
The 200-week SMA is a longer-term indicator that eliminates the small short-term fluctuations in the market in order to offer a better view of the trend on hand. The current average is at $44,200, according to figures from TradingView. While having reached an all-time high, this is far lower than the level reached by the previous bull market in November 2021 when it hit a record $69,000.
This discrepancy is noteworthy because past bull cycles consistently ended with the 200-week SMA heading toward the all-time high of the previous cycle. In the final months of 2021, for example, Bitcoin’s 200-week SMA reached $19,000—the record high of the 2017 bull market. Similarly, the 2017 cycle ended with the 200-week SMA at $1,200, which was the four-year-old high price. If history continues to repeat itself, it means that the rally of Bitcoin still has ample space to carry on before the market reaches its peak.
BTC’s Current Price Range and Future Breakout
Bitcoin is currently trading between $90,000 and $110,000. History would repeat itself, and this consolidation phase will be followed by another higher bullish leg. All previous bull cycles had exhibited the same periods of consolidation before exploding to new highs. As the 200-week SMA has yet to break the 2021 high, BTC may still have a significant rally left before the cycle ends.
Beyond price history, macroeconomic factors could propel additional gains. The recent re-emergence of inflation in the United States has fueled monetary policy fears, which could encourage more investors to move into Bitcoin as a currency debasement hedge. As inflationary pressures persist, the value of BTC as a store of value could rise, further supporting bullish price action.
Options Market Data Supports Bullish Sentiment
Deribit, the world’s largest crypto options exchange, continues the bull outlook presented by the 200-week SMA via its Bitcoin option prices. Data shown by Amberdata indicates longer-dated calls are more expensive than puts, so players expect prices to go up over the coming months.
Further, open interest statistics indicate high concentration in call options in strikes higher than Bitcoin’s present market value of $96,700. The largest open interest is in the strike of $120,000, where notional open interest is over $1.8 billion. This indicates that a huge majority of traders are speculating that BTC will go higher than $120,000 in the short term.
Open interest refers to outstanding derivatives contracts, such as call options or futures, which are still pending settlement. Unnecessary concentration of open interest in call options over the current price level suggests traders are confident that Bitcoin will keep appreciating.
Relating the Current Cycle to Historical Bull Markets
To have a better grasp of the potential trajectory of Bitcoin’s future, it is helpful to compare today’s market forces with past bull runs. BTC has had a historical trend of experiencing exponential growth at the latter stages of its bull run. This is usually followed by a parabolic price increase before eventually reaching its climax.
For instance, in 2013, Bitcoin rallied initially, followed by a correction and consolidation phase, before it broke out to new highs. The same sequence repeated itself in 2017 and 2021. If the current cycle is tracking this historical template, the recent consolidation period might be setting up for a final explosive move higher.
In addition, on-chain metrics also support the optimistic outlook. Long-term holder supply remains at close to all-time highs, and that indicates that investors are not ready to sell at present prices. Such reduced sell-side pressure may contribute to bullish price momentum as well.
Conclusion: More Upside Potential for Bitcoin
Based on the historical significance of the 200-week SMA, Bitcoin’s present consolidation, and the upbeat sentiment in the options market, there is more than enough indication to think that BTC has still not reached its cycle high. Based on trends of the past, the bull cycle currently going on might have a longer lifespan, with Bitcoin having the capability to go north of $120,000 and beyond before peaking in this cycle.
Furthermore, macroeconomic forces, including persistent inflation, will likely continue to drive demand for Bitcoin as a hedge against fiat currency devaluation. With tight supply conditions prevailing and institutional demand increasing, the case for higher prices for BTC remains robust.
No market prediction is perfect, but the convergence of technical analysis and macroeconomic factors suggests that the bull market in Bitcoin is not yet over. Traders and investors must remain vigilant and prepared for potential volatility, but the overall outlook is strongly bullish.
