Moving average

A simple moving average adds the closing prices for a set number of periods and divides by that number, recalculating as each new period closes. An exponential moving average gives more weight to recent prices, so it reacts faster. Short averages follow the price closely, while long ones move slowly and show the broader trend.

The 50-day and 200-day averages are the most widely quoted. When the 50-day crosses above the 200-day, traders call it a golden cross; the opposite is a death cross. In bitcoin, the 200-week moving average has often been cited as a long-term floor during bear markets, and averages are also used as dynamic support and resistance.

Moving averages lag by design, because they are built from past prices, so their signals arrive after a move has started. In sideways markets they produce frequent false crossovers. They describe the trend rather than predict it.