Bitcoin's Moving Averages (Intro with Common)

1月28日

Moving Averages provide us with a dynamic metric to monitor current price in relation to past periods. A Simple Moving Average (SMA) is the average closing price for a set number of periods. An Exponential Moving Average (EMA) weights the most recent closing prices more than the closing prices toward the beginning of the set number of periods.

The current price in relation to a moving average provides us with information about what to expect from the market and can often act as resistance and support when approached. The purpose of this post is to introduce moving averages and provide a chart with as much unfiltered information as possible. Conclusions will be drawn another time.

Using daily closes, I have overlaid the SMAs and EMAs of commonly used sets. The same colors represent the same set of periods while the brighter color is the EMA and the duller color is the SMA.

Since we are accustomed to using numbers in base 10, these are some of the most commonly considered sets:

10 black
20 orange
50 red
100 pink
200 purple
500 dark blue
1000 light blue
1500 light green
2000 black
2500 orange
3000 red
3500 pink
4000 purple
4500 dark blue
5000 light blue

(TradingView wouldn't let me add a set any higher than 4999)

While we are accustomed to using these numbers, we aren't confined. In a separate post I will overlay both SMAs and EMAs again, but will instead use sets that are more familiar to the cycles we experience as humans on earth, such as, 1 Week, 1 Month, 1 Year, etc. In the posts to follow, I will do the same using the Fibonacci Sequence then once more with Lucas Numbers. Finally, I will do it all again considering Weekly then Monthly closes. Later on we'll draw conclusions on which moving averages consistently appear to have the most relevance and when to expect changes in price given moving average positioning.