Key Highlights:
- Bitcoin has initiated a major test of its 20-month simple moving average (SMA) at $87,165, signaling that its broader market “reset” phase has concluded.
- Technical metrics place the Bollinger Bands upper profit-taking band at $121,640 and the lower accumulation base at $52,694, with the central SMA acting as a crucial inflection frontier.
- CryptoQuant onchain data and leadership point to an accelerating bull market, backed by an improving bull-bear market cycle score of 0.186 compared to 0.042 in August.
Bitcoin Battles 20-Month SMA as Cycle ‘Reset’ Concludes
Bitcoin has commenced a pivotal battle with a cornerstone technical level that historically separates bear market accumulation from parabolic bull runs. According to data provided by onchain analytics firm CryptoQuant, BTC/USD is actively testing its 20-month simple moving average (SMA), which stood at $87,165 as of Oct. 16. This long-term trend line serves as the structural baseline for the Bollinger Bands volatility indicator and acts as the foundation for CryptoQuantâs proprietary market cycle signals tool, designed to determine the macro phase of Bitcoinâs market structure.
The standard deviation envelopes of the Bollinger Bands currently place the upper band at $121,640 and the lower band at $52,694. In CryptoQuantâs cycle framework, the territory between the lower boundary and the 20-month SMA represents an âaccumulation base.â The SMA line itself functions as an âinflection frontier.â Historically, losing this frontier from above has triggered significant investor capitulationâan event that last took place in December 2025. With Bitcoin now mounting a challenge against this capitulation zone from below, prior market cycles suggest that decisive breakouts above this barrier open the path toward new all-time highs.
$BTC/USD one-month chart with Bollinger Bands. Source: Cointelegraph/TradingView
Market Cycle Signals Indicate Early-Stage Bullish Momentum
The recovery arrives roughly twelve months after the asset marked its peak in the prior cycle. In an analytical blog post evaluating the setup, CryptoQuant contributor GugaOnChain explained the transition, writing that âJust over a year after the all-time high (ATH) of $124,709 on October 6, 2025, the market has concluded its âreset.ââ
While the standard Bollinger Bands formula does not serve as direct trade execution signals, CryptoQuantâs cycle metrics observe that institutional or “smart money” participants typically realize profits as BTC/USD nears the upper band. Although the current upper target of $121,640 hovers just below the October 2025 all-time high of $126,200, the analytics platform anticipates that the forthcoming expansion will eventually transcend that benchmark. Addressing prevailing retail sentiment, GugaOnChain added: âWhile retail fears the current $82,442, thinking itâs the âtop,â the on-chain indicator $BTC: Market Cycle Signals reveals that we are just warming up,â
pointing directly to the prevailing support foundation.
Bitcoin market cycle signals chart. Source: CryptoQuant
Order Book Liquidity and Long-Term Onchain Indicators Align
Reclaiming the 20-month SMA will require absorbing notable market resistance. The $87,165 moving average aligns closely with Bitcoinâs 2026 yearly opening print at $87,490, compounding its technical weight. Exchange order book data shows deep walls of ask liquidity concentrated throughout this price pocket, setting up a decisive battleground between aggressive sellers and spot accumulation.
Despite these overhead supply zones and persistent macroeconomic pressures facing broader risk-on assets, onchain metrics continue to reflect a firming macro bull market. Earlier this week, contributor XWIN Research Japan underscored readings across three separate onchain metrics that justify âcautious optimismâ
for sustained upward momentum into late October.
This technical progress follows a structural call made in late August by CryptoQuant CEO Ki Young Ju, who officially declared that the bear market was âoverâ
after reviewing the firm’s bull-bear market cycle indicator. Drawing on a composite of onchain profitability measures, the indicator has demonstrated accelerating momentum, advancing from a reading of 0.042 in August to 0.186 in mid-October.
Bitcoin bull-bear market cycle Indicator. Source: CryptoQuant
Why This Matters
The confluence of the 20-month SMA ($87,165) and the 2026 annual open ($87,490) represents one of the most critical structural pivot points for Bitcoin. Historically, crossing back above the 20-month moving average shifts long-term investor behavior from defensive risk mitigation to aggressive spot accumulation. A clean break above the heavy ask liquidity walls positioned near $87,500 would confirm that the post-2025 correction has definitively ended, establishing a clear technical runway toward the upper Bollinger Band boundary at $121,640 and validating early-stage bull cycle indicators.
Frequently Asked Questions
What is the significance of the 20-month SMA for Bitcoin?
The 20-month simple moving average serves as the midpoint for long-term Bollinger Bands and represents an “inflection frontier” in CryptoQuantâs cycle metrics. Trading below it signals capitulation or bear-market accumulation, whereas breaking above it has historically preceded transitions into major bull market phases.
Where are the key price resistance and target levels right now?
Immediate resistance sits between the 20-month SMA at $87,165 and the 2026 yearly opening level of $87,490, where exchange order books show significant ask liquidity. To the upside, the upper Bollinger Band at $121,640 serves as the primary macro target where cycle metrics indicate smart money typically begins taking profit.
What does the bull-bear market cycle indicator currently show?
The bull-bear market cycle indicator, which tracks profitability metrics across the Bitcoin blockchain, moved from 0.042 in August to 0.186 in October. This progression indicates that bullish momentum is steadily accelerating following the official end of the bear market phase earlier this year.
