What is the 21SMA?
SMA stands for Simple Moving Average. It's just a way to calculate the average price of Bitcoin over a specific period. In this case, the 21-week SMA takes the average price of Bitcoin over the last 21 weeks. This green line moves along the chart, giving traders a sense of whether the price is generally going up or down over time.
When the price is above the SMA, itâs often considered a sign that the price could be in an uptrend (going up). When itâs below, it can mean a downtrend (going down).
What does "crossing above the 21SMA" mean?
Recently, Bitcoin's price went above the 21SMA (green line). This is important because it might mean that the market is gaining strength or that Bitcoin could go higher in price.
Traders and investors pay attention to this because itâs a sign that Bitcoin might be getting ready to go on a bullish run (meaning it could go up for a while).
Why does this matter?
Crossing above the 21SMA is a key moment because it suggests that Bitcoin might be getting stronger. However, traders are cautious because itâs not guaranteed. They want to see a second green candle to confirm that this breakout is real, which will make them more confident about Bitcoin going higher.
In simple terms:
Bitcoinâs price just passed an important level (the green line, or 21SMA).
Now traders are watching to see if Bitcoin will keep going up (breakout) or if this is a (fakeout ) and Bitcoin will drop again.
If another green candle forms next week, it will confirm the breakout, and more people will likely buy, expecting prices to rise.
Note - more information
If you're new to the crypto world, here's what you should know
If Bitcoinâs price crosses above the 7-week SMA, it might signal short-term bullishness (the price is going up in the short term).
If Bitcoinâs price crosses above the 21-week SMA, it could be a stronger, more reliable sign of a longer-term uptrend.
In summary:
7-week SMA: Shorter-term signal, reacts quickly to price changes, more volatility.
21-week SMA: Longer-term signal, smoother and more reliable for overall trend direction.
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