Unveiling Crypto Market Insights: 200d Simple Moving Average
GM fellow traders!
In the previous post about Bitcoin cycles, we discussed cyclical nature of Bitcoin and defined bull and bear market timeframes from cycle perspective. Today, we will describe an indicator that can help us define the long term market trends.
Let's explore the concept of the 200-Day Simple Moving Average ("SMA").
The 200-day SMA embodies the average price over the past 200 days. The 200-day SMA is often considered a support level when the price is above the moving average or a resistance level when the price is below it.
200-day SMA is used by some of the most well spoken trend following traders. In interview with Tony Robbins, legendary trader and investor Paul Tudor Jones stated: "My metric for everything I look at is the 200-day moving average of closing prices. I’ve seen too many things go to zero, stocks and commodities. The whole trick in investing is: “How do I keep from losing everything?” If you use the 200-day moving average rule, then you get out. You play defense, and you get out."
Now, let's assess how Bitcoin traded in relation to the 200-day SMA in the previous cycles.
During the majority of the last two bear markets, Bitcoin's value remained beneath the 200-day SMA. However, even in the bullish phases of the cycle, Bitcoin encountered instances of dipping below this moving average. For instance, in the preceding bullish phase, Bitcoin breached the moving average on five separate occasions and was situated below it for around 30 weeks in total.
Notably, on Tuesday, August 17th, Bitcoin slipped beneath the 200d SMA during the current cycle's bullish phase, and this trend has persisted since then. (If you haven't seen our previous post, we welcome you to check our approach on analyzing the Bitcoin Cycles in which we describe bullish and bearish phases of the cycle)
How long do you anticipate Bitcoin to remain below the 200-day SMA this time around?
Feel free to share your thoughts in the comments regarding whether you consider the 200-day SMA pivotal for identifying trends or if you favor alternative techniques.
Let us know in the comments.
In the previous post about Bitcoin cycles, we discussed cyclical nature of Bitcoin and defined bull and bear market timeframes from cycle perspective. Today, we will describe an indicator that can help us define the long term market trends.
Let's explore the concept of the 200-Day Simple Moving Average ("SMA").
The 200-day SMA embodies the average price over the past 200 days. The 200-day SMA is often considered a support level when the price is above the moving average or a resistance level when the price is below it.
200-day SMA is used by some of the most well spoken trend following traders. In interview with Tony Robbins, legendary trader and investor Paul Tudor Jones stated: "My metric for everything I look at is the 200-day moving average of closing prices. I’ve seen too many things go to zero, stocks and commodities. The whole trick in investing is: “How do I keep from losing everything?” If you use the 200-day moving average rule, then you get out. You play defense, and you get out."
Now, let's assess how Bitcoin traded in relation to the 200-day SMA in the previous cycles.
During the majority of the last two bear markets, Bitcoin's value remained beneath the 200-day SMA. However, even in the bullish phases of the cycle, Bitcoin encountered instances of dipping below this moving average. For instance, in the preceding bullish phase, Bitcoin breached the moving average on five separate occasions and was situated below it for around 30 weeks in total.
Notably, on Tuesday, August 17th, Bitcoin slipped beneath the 200d SMA during the current cycle's bullish phase, and this trend has persisted since then. (If you haven't seen our previous post, we welcome you to check our approach on analyzing the Bitcoin Cycles in which we describe bullish and bearish phases of the cycle)
How long do you anticipate Bitcoin to remain below the 200-day SMA this time around?
Feel free to share your thoughts in the comments regarding whether you consider the 200-day SMA pivotal for identifying trends or if you favor alternative techniques.
Let us know in the comments.
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This post does not offer personal investment advice or recommendations. Bitstamp accepts no responsibility for any damage or loss from the utilization of the information presented here.
This post does not offer personal investment advice or recommendations. Bitstamp accepts no responsibility for any damage or loss from the utilization of the information presented here.