The price of Bitcoin is up significantly from its November lows.
On Feb. 16, BTC’s price broke back through $25,000. It had been trading at approximately $15,500 just three months prior.
BTC’s price hitting $25,000 was met with equal amounts of excitement and skepticism.
Many were happy to see the asset trading 61% higher than it was in November.
Bitcoin enthusiasts have been quick to term this a bear market rally, though — a short-lived uptrend in asset prices in what largely remains a bear market — as many are still experiencing PTSD after the rough year crypto markets endured in 2022.
While ultimately it is up to you to buy or sell some digital assets at these prices, you might want to consider certain indicators and past trends before doing so.
The Golden Cross
During the first week of February, BTC’s 50-Day Simple Moving Average (the blue line in the following chart) crossed its 200-Day SMA (the black line in the same chart).
The 50-DAY SMA has since continued moving north of the 200-Day SMA, producing an effect technical analysts refer to as a “Golden Cross.”
A Golden Cross is often viewed as a buy signal, as it can be an indicator that bullish price action will continue.
February’s Golden Cross is only the seventh one in the past 10 years of BTC’s history.
The last time a Golden Cross occurred for BTC was in September 2021, when the asset was priced at about $44,000.
BTC’s price jumped to just over $69,000 within two months of that Golden Cross.
Please keep in mind, though, that a Golden Cross isn’t a guarantee of continued bullish momentum. It simply signifies a decent probability of it.
Looking at price action from the previous crypto winter
If we look back at the previous crypto winter in 2018, we can see that BTC’s price went from a peak of just under $20,000 in December 2017 to a low point of just above $3,000 in December 2018.
Then, from December 2018 to June 2019, BTC’s price rose from just over $3,000 to almost $14,000, gaining approximately 366% in value.
If BTC’s price were to increase by 366% again over the course of six months from its November low, we could see the price of BTC hit approximately $56,730 by May.
We can also view this from another angle and measure how close BTC’s price came to its previous all-time highs during the previous crypto winter.
In the previous crypto winter, BTC’s price reached 70% of its December 2017 high.
If the same were to happen during this crypto winter, BTC would reach a price of $48,300.
So if this crypto winter is anything like the last, we could see BTC trade somewhere between $48,300 and $56,730 within the next three to four months.
Investor beware: History isn’t guaranteed to repeat itself
If crypto investors learned anything from the 2020-2021 crypto bull market, it’s that markets don’t always behave in the ways even the most astute analysts believe they will.
Many models showed the price of BTC breaking through $100,000 in the previous bull run, but it ended up falling quite short of that number.
I mention this because I’d like to be clear that there’s no guarantee we see BTC’s price reach somewhere between $48,300 and $56,730 during this crypto winter.
With considerable macroeconomic uncertainty still affecting all markets and potential heavy-handed regulation for the crypto industry coming down the pipeline, it’s truly anyone’s guess where the price of BTC and other digital assets go.
Do your best not to get too caught up in the narratives that bulls or bears try to spin, and decide for yourself when to buy and sell your crypto assets.
Frank Corva is a cryptocurrency writer and analyst for digital assets at Finder. Frank has turned his hobby of studying and writing about crypto into a career with a mission of educating the world about this burgeoning sector of finance.