Analysis: Bitcoin's drop below the 200-week moving average could present a historic buying opportunity, with median returns exceeding 100%

According to Odaily, Thomas Perfumo, Chief Economist at Kraken, pointed out that Bitcoin briefly fell below the 200-week moving average twice in the past two weeks, but quickly rebounded and reclaimed that level each time. Currently, BTC is trading around $63,900, slightly above the 200-week moving average of approximately $62,358. Analysis suggests that historically, when Bitcoin breaks below its 200-week simple moving average (200-week SMA), it has often provided significant long-term buying opportunities, with historical data showing median returns in this range exceeding 100%.

Thomas Perfumo stated that since 2017, daily closes below this moving average have occurred only about 10% of the time, but these moments typically correspond to "unusually attractive" long-term entry points. Buying BTC around this level has yielded a median return of approximately 113% over the following year and a median return of 313% over two years. Additionally, investors typically do not have to endure prolonged periods of unrealized losses, with a median time to break even of only about 2 days, followed by a median maximum drawdown of around 9% over the next year.

However, Thomas Perfumo also emphasized that historical performance does not guarantee future results, but historical data indicates that Bitcoin often holds significant long-term value in this price range. (CoinDesk)