Bitcoin briefly dipped below its 200-week simple moving average (SMA) twice in the past two weeks, a rare occurrence that has historically marked strong entry points, according to Kraken's Chief Economist Thomas Perfumo. Since mid-2017, only about 10% of trading days have seen closes below this level. Perfumo notes that buyers at this level have historically enjoyed median returns of over 113% over the following year and 313% over two years. Additionally, the median time to break even was just two days, and the median maximum drawdown over the subsequent year was only 9%. Despite the promising historical data, Perfumo cautioned that past performance does not guarantee future results, but emphasized that at these levels, bitcoin has tended to offer immense value.

Key facts

• Bitcoin dipped below its 200-week SMA twice in the past two weeks.
• Only 10% of trading days since 2017 saw closes below this level.
• Median return over one year from this level is over 113%.
• Median time to break even was just two days.
• Median maximum drawdown over one year was only 9%.

KeyAudit data perspective