By the completion of its daily candle on Wednesday, Bitcoin had gained more than 18% in just seven consecutive sessions, abruptly ending the steady decline that had dominated its price action since Bitcoin hit its mid-April high above 30,000. How unusual is this huge gain in just one week, and what has happened in the past after similarly strong rallies? Let’s take a closer look at Bitcoin’s price history to find out.
Bitcoin’s price history suggests higher prices ahead
As we examine Bitcoin’s price history for which reliable data is available (2011 to present), the number one cryptocurrency by market capitalization has made countless gains of more than or equal to +18% in a seven-day span.
Bitcoin Gains >= 18% in Seven Days | BTCUSD at TradingView.com
Because the number of cases depends on the retention time, we’ll start with a list of the number of times this happened in addition to our hypothetical retention times of 7 days to 90 days. Holding time is defined as the amount of time one held Bitcoin before exiting. For example, if someone hypothetically bought Bitcoin after the trigger event (i.e. +18% over a seven-day period) and sold it 30 days later, this would be a 30-day hold.
Bitcoin Occurrences of +18% Gains in Seven Consecutive Days Based on Hold Time (2011 – Present)
- 98 events with a retention time of 7 days
- 73 events with a retention time of 15 days
- 57 events with a retention time of 30 days
- 30 events with a retention time of 90 days
Clearly, gains of this size in just a week are not unusual for Bitcoin, an asset with numerous instances of large price gains, especially given its relatively short price history compared to traditional high-risk assets.
Bitcoin results slightly less bullish in recent years
While a gain of more than 18% in such a short period of time may lead some traders to turn bearish, the data suggests otherwise, with historical average results clearly positive across the board for all holding times from 2011 to present.
Bitcoin gains >= 18% in seven consecutive days with different waiting times. 2011 – present.
Since Bitcoin’s early price history has arguably produced excessive gains compared to its more recent history, let’s take a look at the average results for the same amount of gains over a week, but only the data from the past five years (6/23). /18 to the gift).
Bitcoin gains >= 18% in seven consecutive days with different waiting times. Last five years.
While the results are again positive across the board, the hypothetical results are significantly lower compared to more recent data, with an average 90-day return of +25.6% over the past five years, which is a far cry from the return of +109.4% for the same 90 day window over the entire price history from 2011 to present.
While some traders may argue that the past five years are less representative data due to the occurrence of two major bear markets for Bitcoin and crypto more broadly, Bitcoin has shown positive follow-up for both time periods on average across all of the holding times we examined. While the past does not predict the future, the recent strong price increase seems to indicate that Bitcoin is poised for bigger gains in the relatively near future.
DB the Quant is the author of the REKTelligence Report newsletter on Substack. Follow @REKTelligence on Twitter for evidence-based crypto market research and analysis. Important Note: This content is strictly educational in nature and should not be considered investment advice. Featured images created with Tableau. Charts from TradingView.com.
