Deep Resets Predict Stronger Bitcoin Recoveries, Binance Research Finds

A recent report from Binance Research found that the length of time Bitcoin (BTC) spends below its 200-day moving average can help identify stronger recoveries. The firm analyzed 12 earlier golden crosses, where the 50-day moving average climbs above the 200-day average, and found a correlation between deeper resets and higher peak gains.

The study sorted past crosses by how many days BTC closed below its 200-day average in the preceding year. The six crosses after at least 150 such days saw peak gains of roughly 100% to 600% within a year. In contrast, crosses after shallower resets varied more, with four of six peaking below 100%.

However, Binance cautioned that the findings have limitations, including small sample sizes and overlapping data points. The firm also noted that current conditions pose a separate test for Bitcoin's recovery, citing rising bond yields and inflation concerns.