Bitcoin clears the 50-week average that ended four of the last five bear markets

The close cleared the line by $2,371 ^[1], or about 3% ^[2]. Bitcoin is roughly 42% above the $57,000 July low that Bitget's chief analyst Ryan Lee cited ^[3][4], and it printed its highest weekly close in four months ^[6]. A 3% cushion is one ordinary week of trading.

The two ways the record counts this indicator do not produce the same sample. Alex Thorn, Galaxy Research's head of firmwide research, described the 50-week average in August as a ceiling during bear markets ^[9], and said in a research note: "In four of the five completed bear markets, once the 50-week moving average was first broken to the upside, the bear market bottom was definitively 'in.'" ^[7] He added: "Essentially, retaking the 50w MA has previously confirmed the end of a bear market." ^[8] Galaxy also cautioned in August that the signal is not infallible ^[28], counting 13 weekly crossings back above the average, of which two were followed by a lower low, both in the 2021-2022 bear market ^[10]. Eleven of 13 is 85% ^[11]; four of five is 80% ^[12]. Both failures sit inside one bear market, so the number of independent failed episodes is one.

Collective Shift founder Ben Simpson said on Tuesday, before the close, that a close above the average would be "the last thing I need to see before I call this a bull market" ^[13], and he put the gains after the 2017, 2020 and 2023 breaks at between 700% and 900% ^[14]. Applied to $81,159, that range implies $649,272 to $811,590 ^[15]. Three observations.

Lee told Cointelegraph the close added weight to the case that the recovery was underway ^[16], and said: "In previous cycles, reclaiming this level has tended to happen after the major low was established and longer-term momentum had started to recover." ^[17] One weekly close was not enough to confirm a cycle bottom, he said ^[18]. "What matters now is whether Bitcoin can stay above the 50-week average and continue forming higher lows," Lee said ^[19], adding: "We have seen failed reclaims in previous cycles, particularly when the macro environment remained difficult." ^[20] His case for the backdrop is that repeated liquidations have cleared out the leverage that had built up, and that institutional demand is showing signs of returning ^[21].

Trader Craig Cobb is watching a different number. He told Cointelegraph he looks at $83,000, "which will mean there is no lower high on the monthly chart and therefore the trend is no longer down" ^[22]. That is $1,841, or 2.3%, above Sunday's close ^[23]. His second test is the three-month chart: a run of red quarterly candles ending in a green one, then a later candle breaking that green candle's high ^[24]. Cobb said the red-to-green transition has happened 15 times, the first green candle's high was broken in 11 of those, and all 11 eventually produced a new all-time high ^[25], or 73% ^[26]. "So combine $83,000 being broken and the close of the September three-month candle, then a break of the high and I will say the bull market has begun," Cobb said ^[27].

In my view one close 3% above a line describes a bottoming process and not a confirmation, and the test I would apply is Lee's: two or three more weekly closes above $78,788 with a higher low in between ^[19]. The counter-thesis belongs to Lee as well, and it is not weak. If repeated liquidations really did clear the leverage ^[21], the forced seller who produced the two failed reclaims of 2021-2022 ^[10] is not in the book this time. A weekly close through $83,000 that holds would make the cautious reading look slow ^[22]. A close back under $78,788 would end the argument the other way ^[1].