Bitcoin (DMA) 200-day moving average (BTC) continues to slide into the longest downtrend in summer 2014.
Price data collected over the last 200 days indicates that the moving average Bitcoin has dropped from $ 10,300 in early June to the current $ 8,300. Although still above $ 2,000 compared to the $ 6,150 moving average at the start of 2018, this is the first decreasing trend for the 200-DMA in three years. The last slide saw the average decline from $ 650 to June 2014, to $ 250 to July 2015.
Traders use DMA to determine the extraordinary price of an asset and identify changes to the established trend . They are calculated by dividing the total sum of past closing prices – within a certain period of time – by the number of days. An increase in the DMA indicates that an asset is an uptrend, with a declining DMA showing a downward trend.
The number of days included in a DMA depends on what it is used for. Longer medias such as a 200-DMA are useful for "hodlers"; operators with short-term positions benefit from a 20-day or 50-day moving average.
Although based on past trends, they may predict imminent future market trends. Traders look for "golden-crosses" when a 50-day DMA crosses a 200-DMA, which is a bullish signal for the market; they also look for "death-crosses", when the 50-day average falls below that of the 200-DMA.
Moving averages help filter out noise from unexpected or sudden price spikes; Longer DMAs with more uniform curves. For a volatile asset like cryptocurrency, reported in a recent UBS report as "unstable", this is particularly useful. The sharp fall in the price of BTC, such as following Winklevoss's SEC refusal of ETC Bitcoin, would not greatly affect the trend shown by a long-term bitcoin moving average.
As the chart below shows, Bitcoin hit a crossback death at the end of March this year. Since then, the gap between 50 and 200-DMA has decreased; with the recent increase in prices of BTC that brought them closer together.
(Graph for Trading View)
Intercontinental Exchange, which owns the New York Stock Exchange, has announced the launch of New United States regulated BTC market in November. Called Bakkt; has the support of Microsoft and Starbucks.
The DMA chart shows bullish news in July compared to Bitcoin ETFs and greater institutional involvement helped make this possibility more possible. August has been a disappointing month so far for the price of BTC. Exceeding $ 8,000 at the start of last week, the bitcoin has just managed to keep above $ 7,000.
The author is invested in BTC, mentioned in this article.