Bitcoin’s run this weekend would have observers believing that the bull market is back. But the data also backs it up.
A new report from data firm CryptoQuant shows that the leading cryptocurrency crossed above its 365-day moving average — a signal that the asset has finished being in a bear market.
Bitcoin’s price surged in August and had its best run in years, spurred by an announcement from the U.S. Treasury saying it would at least double the size of its liquidity-support buyback operations. Its run cooled but then last week shot up again and was recently trading for $86,598 after trading as high as nearly $87,330 on Monday.
“This crossover is the definitive technical signal that has marked the start of Bitcoin’s bull markets in past cycles, and it is the first time price has reclaimed the 365-day moving average since March 2023,” the report read.
It added that the moving average is a “cycle-defining” line and confirmed the start of bull runs in previous years.
“Its track record across cycles is why this reclaim carries real weight rather than being a routine bounce,” the report added.
The report continued that long-term holders appear to have finished selling, making the way for new investors to enter the market.
Bitcoin notched a record of $126,080 in October of last year but then began to sink later that month after the biggest liquidation event in crypto history saw over $19 billion in bets closed.
In the first half of this year it continued its plunge after the Federal Reserve made it clear it was in no hurry to lower interest rates and investors increasingly threw money at artificial intelligence-related stocks to get returns.
But the so-called debasement trade — where investors throw money at an asset to hedge against a currency losing its value — is hot again. Bitcoin and precious metals like gold have done well when the dollar has weakened.
And the Federal Reserve last week raised interest rates to get sky-high inflation in the U.S. under control. Investors shrugged the central bank’s move off and bought up the asset.
Now, people seem more interested in buying an asset that can protect them from government debt and deficit. In August, total U.S. debt topped $40 trillion for the first time.