Several well-known cryptocurrencies are trading above their 200-day moving averages, a development .
A moving average (MA) is simply an ongoing calculation of the closing prices of an asset over a specified period of time, but is also a tool traders use to gauge the asset’s trend direction as well as support and resistance levels.
While a moving average of any length can be used, the 200-day moving average is a standard in financial analysis. Put simply, if an asset trading above the 200-day MA is considered bullish (likely to move higher), while one trading below it is considered bearish (likely to move lower).
Since the long-time bitcoin is not currently trading above its 200-day moving average, one could be forgiven for assuming all other cryptocurrencies are following its footsteps.
However, that is not the case.
Signs of life emerge
Of the top 20 largest cryptocurrencies by market capitalization as per CoinMarketCap, both the BTC and USD pairs of litecoin (LTC), binance coin (BNB), Tron (TRX) and Maker (MKR) are currently trading above their respective 200-day moving averages.
Both pairs trading above the moving average indicates the markets for LTC, BNB, TRX, and MKR are much stronger than those with acceptance above just one trading pair moving average or those with acceptance above neither – most of which fall under the latter category.
Indeed, the four have the most bullish markets, but as can be seen above, their performance is not yet the norm. Twelve of the top 20 have neither their or USD pairs above the 200-day MA, and as the data below shows, several are still very far away.
Distances to the 200-day MA
Of the remaining top 20 by market cap that are not above their USD-denominated 200-day MA, cash (BCH) is by a large margin the farthest away from achieving a market while is the closest.
According to data from CoinMarketCap, the price of BCH/USD would need to increase 124 percent in order to reach its 200-day moving average while /USD would need to increase just 8 percent.
It’s worth noting Cash underwent a resulting in the creation of two new , Cash ABC and SV. Cash ABC retained the BCH/USD ticker on most exchanges so its longtime price history may not be the best reflection of the current state of the Cash ABC market, given the fork has existed less than 200 days.
While it does express a weak market, an asset excessively far below its 200-day moving average is not always a negative indication. It can also be a sign of extreme oversold market conditions, similar to how the is used to gauge ’s market conditions based on its relation to the 200-day MA.
With that in mind, the assets that are farthest from their respect 200-day moving averages like cash and Zcash, which needs to increase 71 percent to reach its 200 day MA, could be seen as the most overdue for a positive correction.
Disclosure: The author holds , LTC, ETH, ZEC, AST, REQ, OMG, FUEL, ZIL, 1st and AMP at the time of writing.
via Shutterstock; Charts by
Published at Wed, 13 Mar 2019 06:09:13 +0000
