Another +54% By The Halving? Stats Say Yes.
Bitcoin's Current Setup Suggests Higher Prices In 60 Days
IN TODAY’S REPORT
What we cover: STATS EDITION. Bitcoin’s current technical setup. 63 days out from next halving event. Open arms.
TODAY’S STATS
Adios Post-Approval Slump
Shrugging off the post-ETF approval slump dominated by the sell-pressure exodus from Grayscale’s closed-end trust turned spot ETF, Bitcoin now trades with a $50k (and above) handle just 63 days out from the next halving event expected April 17th.
Put another way, Bitcoin has surged higher and now looks poised to gain over 20% in under two weeks. The upshot? It’s been a damn good 10 days.
With this in mind, let’s take a look at what’s happened next following similar past surges. More specifically, what’s happened when similar setups have occurred when Bitcoin is firmly in an uptrend, defined in today’s second condition below.
BITCOIN (BTC/USD). Daily Chart with Today’s Conditions.
To take a closer look at the future implications of the current setup, we need to run a simple test over all of Bitcoin’s reliable history from 2011 to the present. Our “query conditions” represent a basic definition of the technical state of BTCUSD. The simpler the conditions the more data points we get to consider (three conditions is our typical maximum).
First, our simple query conditions with a 60-day hold:
BITCOIN SETUP CONDITIONS
CONDITION 1: Bitcoin gains >= +20% within 10 days
CONDITION 2: Bitcoin's 50-day SMA > its 100-day SMA > its 200-day SMA > its 365-day SMA
ENTRY AND EXIT CONDITIONS:
1. ENTRY CONDITION: Enter long ("buy") at the open of the next candle
2. EXIT CONDITION: Exit ("sell") 60-days laterWith traditional markets in mind, this setup appears extraordinary at first, a rare technical event which probably has only a handful of data points.
This would be a mistake to assume, however. Since 2011, Bitcoin has experienced these conditions 22 times — hardly a rare event. On the chart below, all hypothetical trades since inception are shown with a 60-day hold time.
BITCOIN (BTC/USD). Today’s Conditions: All Trades w/ 60-day Hold. 2011-Now.
While the largest gain occurred in 2011 — the extraordinary outlier of +1880% — the gains for this setup are actually quite evenly scattered throughout Bitcoin’s entire history right up to the present, something we’ll see more clearly in our next chart.
With only 6 losses to date using our conditions, Bitcoin has gained following this setup precisely 72.7% of the time. While a couple of these hypothetical losses exceed -50%, the average loss is -35.26%.
Now let’s throw out the phenomenal outlier from Bitcoin’s early history and get an arguably more realistic look at what we might expect going forward.
BITCOIN (BTC/USD). All Trades w/ 60-day Hold, EXCLUDING OUTLIER. 2011-Now.
While the removal of the massive outlier hits the average trade hard, Bitcoin’s average trade following this setup still lands at an enviable +54% within just 60 days. If this plays out in 2024, we could potentially be looking at a new all-time high by April’s halving. While this is not something we predicted for 2024, we’d welcome it with humility and open arms. LFG.
peace_love_crypto-DB
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