The gains are likely just getting started for ol Bitcoin
Bitcoin did something the other day that likely means even more good things are on the way.
I touched on it briefly in a post yesterday, which can be seen here:
What might this good thing be you may be wondering?
Well, bitcoin broke back above its 200 day moving average for the first time in the last few months and only the 3rd time in the last 15+ months.
As Tom Lee pointed out, that is likely very good news for the next 6 months...
Historically, when bitcoin breaks above its 200 day moving average, it returns just under 200%, or about 3 times its current price.
Which is why some were quoting Tom Lee as saying that bitcoin will hit $27k within the next 6 months.
(Source:
)https://twitter.com/fundstrat/status/1222566246455160832
- fundstrat
But wait, didn't bitcoin just break the 200 day moving average late last year and nothing came of it?
Yep, that is correct.
Bitcoin also briefly broke above its 200 day moving average late last year when it rallied from around $7k all the way up to $9.5k in a matter of a few days.
However, breaking the 200 MA proved to be short lived and the price basically fell ever since until the most recent rally.
So, that means that breaking the 200 day moving average to the upside doesn't ALWAYS mean 200% gains, though it's pretty close.
According to data compiled by Fundstrat Global Advisors and Tom Lee, bitcoin has an 80% win rate when it breaks the 200 day moving average and averages just under 200% returns.
That means, yes it fails sometimes, like we saw late last year, but on average it sees big returns 8 out of 10 times based on historical data.
Which means...
The odds that this one plays out hugely positive is probably even higher now that the last one failed.
The next 6 months should be very fun for bitcoin investors.
There will be dips along the way, but we have very good historical evidence that bitcoin is likely to see major returns over the next half year.
Stay informed my friends.
-Doc