The month of February was difficult for bitcoin, but the digital currency came out on top in the end. After three months of consecutive red closures, bitcoin has finally achieved its first green month. This is due to the rally that started towards the close of the month. However, this is not the first time that the digital asset has shown such a tendency, and historical performance speaks to what may be anticipated from the cryptocurrency in the future.

FOR BITCOIN, THE FIRST GREEN MONTH HAS COME TO AN END.

Bitcoin has routinely closed in the negative in the three months since its high in November. It struggled in this pattern until a late-February surge broke, allowing it to close in the green once again. After three red closures, this is the first green closing. It is relevant in light of previous trends induced by incidences like this one.

After three red closures, the most recent one-month green closing occurred in July 2021. Remember that in July of last year, bitcoin had reached a high and was heading into three months of fluctuating values. However, after the support of the 1 week MA50 and the formation of the July one-month green candle, the price of the digital asset had rebounded to a new high.

Another example was the one-month green candle that appeared in June 2015 following three straight red months. What had followed was essentially the bottom of the 2014-2015 bear market and the start of the next bull cycle. The same was true for the one-month green candles that emerged following consecutive red months in February 2019 and December 2011.

Based on prior performance, this might indicate that the digital asset is preparing for another bull run. It would be more persuasive considering that bitcoin’s price remains above the 50-day moving average.

BUT IT ISN’T ALL GOOD

The ever-changing trends in bitcoin are one constant. As a result, a green candle after three or more straight red months has not necessarily indicated a positive future for the digital asset. It has sometimes meant the exact opposite, providing the catalyst that eventually drives BTC back into another bear trend.

This was the case with the one-month green candle that appeared in October 2019 following three red months. Following this, the price of the digital asset fell to a new low as the 1 week 50MA failed to hold as it had done before. The similar thing happened in November 2014, when the asset fell to a new low after failing to hold the 1W MA50 support. This occurred again in May 2014, hitting a new low.

The failure of bitcoin to hold above the 1W MA50 has been a recurring event in all of this. This suggests that in order for bitcoin to begin a bull movement, the price must remain above the 1W MA50. Failure to do so risks sending the market to new lows, which at this moment would be a dip below the $30,000 level.