Bitcoin Set To Give Major Buy Signal In 3 Days

Jun 28, 2023

IN TODAY’S REPORT

What we cover: Bitcoin may soon close above its 20-month SMA. Signal history from 2012 to now. Monthly Bitcoin signal one of the most bullish we’ve seen.

TODAY’S TECHNICAL SETUP

Bitcoin Looks Poised to Close Above Its 20-Month SMA Within Days

Fueled by the recent flood of new Bitcoin spot ETF applications from some of Wall Street’s most venerable firms, Bitcoin recently vaulted higher to once again attack the 30,000 wall of resistance where it’s currently stalled.

While the 30k barrier is widely watched and discussed, Bitcoin’s new attack on its 20-month moving average is arguably far more significant based on multiple past signals.

`BITCOIN (BTC/USD). Monthly Chart with 20-month Simple Moving Average.`

The 20-month simple moving average (20-month SMA) nearly perfectly divides bull periods from bear periods throughout Bitcoin’s history from 2012 to now.

Using the elegantly simple logic shown in our query’s entry and exit conditions below, virtually all of Bitcoin’s worst drawdowns get eliminated by exiting Bitcoin once it closes below its 20-month SMA.

OUR BITCOIN QUERY'S ENTRY AND EXIT CONDITIONS:

1. ENTRY CONDITION: Bitcoin closes above its 20-month SMA at month end. Enter long ("Buy") at the open of the next day's candle

2. EXIT CONDITION: Bitcoin closes below its 20-month SMA at month end. Exit position ("Sell") at the open of the next day's candle

Take a look at the signal history below. “LE” indicates a buy signal while “LX” indicates a sell signal. The yellow highlight shows the periods when the logic sold Bitcoin following a long exit signal and was out of the market. Get ready for an aha moment.

`BITCOIN (BTC/USD). 20-Month SMA with Hypothetical Buy/Sell Signals. $100k / trade.`

Throughout its history, exiting once Bitcoin closes below its 20-month SMA sidesteps much of the 2014-2015 bear market, the worst of the 2018-2019 bear market, and so far nearly all of the current 2022-2023 bear market. Only during the early 2020 pandemic did the logic get briefly whipsawed before re-entering at the start of the next month.

As we publish today’s Report, Bitcoin looks set to once again close above its 20-month SMA for the first time since March 2022. Naturally, we’ll know for sure on July 1st, just three days from today.

TODAY’S STATS

Monthly Bitcoin Signal One of the Most Bullish We’ve Seen

Now let’s take a look at the summary stats using today’s simple signal logic.

While occurrences are few in number due to the infrequent nature of monthly signals and Bitcoin’s brief history relative to other major asset classes, the four hypothetical trades delivered a stunning average trade of +2499% with a winning percentage of 75%.

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Even more compelling, the worst trade sits at just -24.8%, leading to a breathtaking profit factor of 403.2, indicating that the sum of gross gains is over 400 times greater than the sum of gross losses.

While the past does not predict the future, recession storm clouds may be on the horizon, and regulatory uncertainty continues to loom large, we may just be at the cusp of a colossal buy signal for the King Crypto.

THE TLDR

A Few Key Takeaways

Text within this block will maintain its original spacing when published

✔ While the 30k barrier is widely discussed, Bitcoin’s new attack on its 20-month moving average is arguably far more significant
✔ The 20-month simple moving average nearly perfectly divides bull periods from bear periods throughout Bitcoin’s history from 2012 to now
✔ We may just be at the cusp of a colossal buy signal for the King Crypto

peace_love_crypto

-DB

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