What happens when Bitcoin gained over 18% in seven days before?

The completion of Wednesday’s daily candle saw Bitcoin gaining over 18% in just seven consecutive sessions, which abruptly ended the steady drift lower that had dominated its price action since mid-April. This magnitude gain in only a week’s time is not unusual for Bitcoin, as it has experienced numerous instances of gains greater than or equal to +18% over the span of seven days in the past. However, gains of this magnitude in just a week’s time are not uncommon for Bitcoin, an asset with numerous instances of large price advances especially when considering its relatively short price history compared to traditional risk assets.

While a gain of over 18% in such a brief time period may lead some traders to lean bearish, the data suggests otherwise, with historical average results clearly positive across the board for all holding times from 2011 to the present. However, the hypothetical results over more recent data are significantly lower, with the average 90-day return of +25.6% over the past five years a far cry from the +109.4% returns for the same 90-day window over the full price history from 2011 to the present.

While the past does not predict the future, the recent powerful price advance appears to suggest that Bitcoin is poised for greater gains in the relatively near future.

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