Historical data related to a significant indicator indicates that bitcoin (BTC) has substantial growth potential, especially as renewed inflation in the U.S. could pose a risk to the current upward trend.
The 200-week simple moving average (SMA) for bitcoin’s price, designed to mitigate short-term market volatility and clarify the overall trend, was recorded at $44,200 at the time of this writing, according to TradingView.
While this average marks an all-time high, it remains considerably under the previous bull market peak of $69,000 reached in November 2021.
This detail might be crucial, as historical patterns indicate that bull markets typically conclude with the 200-week SMA advancing to the previous cycle’s record prices.
For example, the last bull market concluded in late 2021 with the 200-week SMA climbing to $19,000, reflecting the peak of the 2017 bull market. Likewise, the bull market of 2017 wrapped up in December that year, with the 200-week SMA reaching a record price exceeding $1,200 established four years earlier.
If historical trends continue, the current trading range of bitcoin, between $90,000 and $110,000, is likely to resolve in a bullish manner, setting the stage for the next price surge.
The options market on Deribit corroborates the bullish perspective suggested by the 200-week SMA. Specifically, data from Amberdata shows that long-term options, with expirations of three months or more, reflect a higher cost for call options compared to put options, signaling a market expectation for increasing prices.
Additionally, a significant portion of open interest focuses on call options with strike prices above BTC’s current market price of $96,700. As of this writing, the $120K strike call option holds the highest popularity, with a notional open interest exceeding $1.8 billion, underscoring optimistic market sentiment. Open interest represents the total number of active or outstanding contracts at any given moment.
