History Favors Bitcoin Buys Below 200-Week Average With Over 100% Median Upside, Kraken Finds

Bitcoin briefly dipped below its 200-week moving average twice over the past two weeks, a rare event that Kraken says has historically lined up with strong long-term entry opportunities.

Bitcoin (BTC), recently trading near $62,708, has been testing a level that has often preceded powerful bullish cycles, Kraken Chief Economist Thomas Perfumo told CoinDesk.

That level is the 200-week simple moving average (SMA), a long-term trend gauge that reflects Bitcoin’s average price over roughly four years and helps smooth out short-term volatility.

During the past two weeks, BTC slipped below this level on two occasions before recovering back above it by weekly closes. At the time of writing, Bitcoin is trading near $63,900, slightly above the 200-week SMA at $62,358.

Perfumo noted that sustained closes below this threshold are rare, occurring in only about 10% of trading days since 2017, and have historically coincided with periods of strong forward returns for buyers.

He added that “buyers at this level have historically generated median returns of over 113% after one year and around 313% after two years.”

The median figure reflects the middle outcome in the dataset, meaning half of historical results were higher and half were lower, making it less sensitive to outliers than an average return.

Historical data also points to relatively limited downside risk for those accumulating at these levels.

Perfumo said investors who bought below the 200-week SMA have typically broken even within just two days on a median basis, while experiencing an average maximum drawdown of around 9% over the following year.

He stressed that past performance does not guarantee future outcomes, though historical patterns suggest Bitcoin has often represented attractive value when trading near this long-term trend indicator.