Bitcoin Tests Crucial Trend Line in Bid for New Cycle Highs

Bitcoin is mounting a challenge against a critical technical threshold that has historically preceded major macro advances. According to data from onchain analytics platform CryptoQuant, the cryptocurrency has engaged in a fresh battle to reclaim its 20-month simple moving average (SMA).

The Technical Setup

The 20-month SMA currently sits at $87,165 as of October 16, serving as the foundational trend line for the widely followed Bollinger Bands metric. This framework uses standard deviation to establish upper and lower boundaries around the moving average. Presently, the upper band rests at $121,640, while the lower band stands at $52,694.

CryptoQuant characterizes the space between the lower band and the 20-month SMA as an accumulation base. The moving average itself acts as an inflection frontier, marking a zone of previous investor capitulation when prices breached the level from above in December 2025. Market history indicates that successfully breaking back above this threshold often paves the way toward new cycle peaks.

Market Psychology and Reset

GugaOnChain, a contributor at CryptoQuant, noted that the broader market has concluded its reset phase roughly a year after Bitcoin notched an all-time high of $124,709 on October 6, 2025. While retail participants often view current price levels near $82,442 with apprehension, on-chain cycle indicators imply that the broader market expansion remains in its early stages.

Additional confluence reinforces the significance of the 20-month SMA, as it aligns closely with Bitcoin's opening level for 2026 at $87,490. This convergence increases its potency as a technical barrier, with exchange order books displaying substantial ask liquidity in the immediate vicinity.

Why it matters

Understanding structural market phases helps institutional and retail participants separate short-term volatility from broader macro trends. Despite broader macroeconomic headwinds facing risk assets, specialized onchain metrics suggest that market momentum is shifting. Analysts from XWIN Research Japan recently highlighted multiple onchain indicators signaling a return of bullish momentum through the conclusion of October. Furthermore, CryptoQuant CEO Ki Young Ju stated in late August that the broader bear market had officially ended, supported by a composite bull-bear market cycle indicator that has since shown accelerating momentum.

What to watch

Observers will monitor whether Bitcoin can decisively pierce the 20-month SMA and absorb the heavy sell liquidity clustered around exchange order books. Sustained movement above this inflection frontier will provide further clarity on whether the digital asset can successfully retest its previous macro highs established in late 2025.