economistLisbon SHORT Visual arithmetics exercise with MA50 and MA200

economistcrypto (31)in #bitcoin • 6 years ago

In the graph above we can see two vertical lines.

The first represents 08/09, or 200 hundred days ago.
The right one represents 02/02, or 50 days ago.

This is very important to know what these two MOVING AVERAGES will do. And that is exactly what they do, they move.
The lines represent the eldest days in which the closing values start to count.

---> Let's assume BTCUSD will stay below 10k for the next days.

We still have to discount lower values at the 200-day moving average and the 50-day moving average. So even if BTCUSD stays at 8k, these averages will go lower.

On the next 6 days, the MA200 will "discount" lower closing values registered between 08/09 and 14/09, so if BTCUSD stays at this level for the next 6 days, the MA200 will go lower. But after that, it will start to let go of lower values and then it will start going higher and higher as it starts only consider higher values, the values we saw from 14/09 to 16/12. This means the MA200 will go up steadily in the next few weeks.

As for the MA50, if it stays in the the range below 10k, it will soon be caught by the MA200. This is because, because the density of the distribution of the values in the previous 50 days will make the MA50 fluctuate around 10k.

The conclusion is that, if there isn't a bounce in BTCUSD, the death cross will surely happen in the next 30 days.