![]() This average value is represented as a line that moves each day, since each day’s SMA will use the last 20 days including the one it’s on, thereby making it a “moving” average. ![]() Thus, as with a simple arithmetic mean, the moving average formula for an SMA of 20 days is as follows: Take the candle closing prices of the last 20 days and divide them by the number of days (20) to get the average value. For example, if we look at a daily Bitcoin chart with a daily moving average of 20 periods applied, we will see what the average price was over the last 20 periods, i.e., the previous 20 days (as it’s a 20-day moving average). How To Calculate a Moving Average?įor the sake of this article, we’re going to stick with the basic Moving Average (MA), otherwise referred to as a Simple Moving Average (SMA). This can be in the form of a basic “Moving Average,” which is a simple arithmetic mean, or an “ Exponential Moving Average,” which assigns more weighting to the most recent prices. The moving average is exactly what its name implies, a calculation of the average price that an asset is trading at over a set period. Not only are MAs used as stand-alone trading indicators and technical analysis tools, but they are also incorporated within other trading indicators, such as within Bollinger Bands. One of the most popular indicators across all markets is the Moving Average (MA). However, to maximize the effectiveness of moving averages, a trader should backtest as much as possible. For example, if we are looking at a daily Bitcoin chart with the 20 MA applied, we’re going to see what the average price is over the last 20 periods, i.e., the previous 20 days, hours, minutes, or other set period.įor the sake of this article, we’re going to keep this simple. ![]() The moving average (MA) is a calculation of the average price that an asset is trading at over a set period.Using Moving Average (MA) Indicators on Phemex.The Best Moving Average Indicator For Day Trading: The Moving Average Crossover. ![]() We do not give advice on financial products. In order to regain a bullish posture it needs to begin trading back above the psychological level at $50,000, as well as the key point of resistance at $53,000.įor more news, guides and cryptocurrency analysis, click here.ĭisclaimer: The views and opinions expressed by the author should not be considered as financial advice. It’s worth noting that even during the most aggressive bull markets in Bitcoin’s history, corrections of more than 30% are fairly common, with it dropping from $40,000 to $27,000 in January before making a new all-time high in February.ĭespite the fact that Bitcoin has now formed consecutive lower highs and low lows, it is still too early to call a bear market considering its ability to surge from 30% corrections in the past. However, as cryptocurrency hype continues to subside following last month’s listing of Coinbase on Nasdaq, many are questioning whether Bitcoin has now started its transition into a bear market. The 200 EMA has not been tested since it was broken to the upside in April of last year, with the entire bull market trading well above the technical level of support. He later added clarity by stating that “Tesla has not sold any more of its Bitcoin”, although the impact of his original comments are potentially devestating for the asset class in the medium to long term.īitcoin was saved by the daily 200 exponential moving average, which provided momentary restbite with a bounce up to around $45,000. The move to the downside was triggered by a series of tweets by Tesla CEO Elon Musk, who alluded to the fact that Tesla may sell its Bitcoin holdings before next quarter. Bitcoin succumbed to downside pressure over the weekend with a gruelling sell-off that saw it drop to as low as $42,200.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |