Galaxy Research backtests Bitcoin bear-market recoveries, finding 50-week moving averages more reliable than 50-day MAs for confirming cycle bottoms.
Macro & Markets ·
Galaxy Research examined Bitcoin's bear-market recoveries by backtesting price action across six completed cycles since 2011 plus the current drawdown, using a 50%-or-greater closing-price drawdown sustained for at least 90 days as the defining threshold. The analysis revealed that while 50-day moving average reclaims occur quickly, they often signal false bottoms: 43 of 106 such reclaims failed across past bear markets, and the first reclaim failed in every single cycle examined.
The 50-week moving average presented a markedly different picture, according to the research. Only 2 of 13 reclaims of the 50-week MA failed, suggesting this longer-duration indicator offers more durable confirmation of cycle lows. Bitcoin was trading near $77,500 at the time of analysis, representing a 32.4% gain from the June 30 low, while the 50-week MA stood at $82,470.
The study implies that a weekly close above the 50-week moving average could serve as a stronger confirmation signal that a bear cycle bottom has genuinely been established. Whether Bitcoin sustains a move above that threshold and whether near-term price volatility tests the metric remain open questions.