In a recent Twitter thread, Yassine Elmandjra, analyst at Cathie Wood's Ark Invest Management, noted that Bitcoin, the largest cryptocurrency, has managed to reclaim the 200-week moving average.
This has only happened seven times in history. On average, Bitcoin would soar by 240% after each such event, according to Ark Invest's calculations.
Elmandjra has noted that the price of the flagship cryptocurrency is now sitting below its cost basis. This also happened during the worst days of the pandemic-driven market sell-off in March 2020 after the price of Bitcoin infamously halved within 24 hours.
That said, Elmandjra is not rulings out that Bitcoin may end up going lower if this bear market replicates the trajectory of the 2018 bear winter. Back then, the top cryptocurrency lost well over 80% of its value within a year.
Bitcoin and cryptocurrency remain in U.S. Federal Reserve Chair Jerome Powell’s grip. As Elmandjra believes, uncertainty surrounding the central bank's policy is still the main headwind for the Bitcoin price.
At press time, the largest cryptocurrency is changing hands at $23,305.