What Does the 5-day Moving Average of Cryptocurrencies Mean (Explanation of Cryptocurrency Candlestick Chart)

What does the 5-day moving average of cryptocurrencies mean? It refers to the correlation between the trend of Bitcoin’s price and its 5-day moving average. From a period before April 1 (i.e. 7:00 PM on April 3, 2019, Beijing time), the average increase of Bitcoin in 2018 was calculated to be more than 200% based on the historical price fluctuations of Bitcoin. Bitcoin had reached its all-time high in November 2018. From the end of 2017 to the end of 2018, Bitcoin experienced a decline of over 60% from its historical high in early 2017. In early 2020, as the market gradually recovered and market demand increased, the price of Bitcoin continued to rise.

However, when the price of Bitcoin breaks through the resistance of previous highs, if it falls to the previous low position, investors will sell their chips to buy Bitcoin. Therefore, in the coming months, the price of Bitcoin will continue to rise, but significant fluctuations have only recently emerged.

Explanation of Cryptocurrency Candlestick Chart

Editor’s note: This article is from the Fenghuolun Community (ID: FHBT18), written by Peipei and authorized for reprint by Odaily Star Daily.

Hello everyone, I’m Xiaoi. Today is Wednesday, and let’s talk about the recent candlestick chart of Bitcoin and Ethereum. First, let’s talk about some concepts:

1. Ethereum has recently experienced a major market breakthrough; 2. The DeFi ecosystem is growing rapidly, with a large amount of funds flowing into various public chains; 3. The market capitalization of altcoins continues to grow, with a total market value of around $6.16 billion; 4. The recent best-performing project, Binance Smart Chain (BSC), has launched two new testnets. These are early indications of new projects. But in fact, they are also good references for these old tokens. Therefore, overall, Ethereum and BSC’s development are still highly regarded. However, if we look further back, I believe many investors would not find much significance in the chart above. Also, let’s take a look at other coins and see if their current trends conform to previous historical patterns, such as ETH/ETC/BCH, and their respective characteristics. 1. Ethereum’s candlestick is currently a long bearish candlestick parallel in front of the K-line; 2. The most obvious characteristic of altcoins is that they are not influenced by fundamental changes or negative news, mainly experiencing price increases. So, in the short term, this pattern may not have a significant impact on the market. The main points here are: first, it does not necessarily represent what will happen to the entire market because it is in a completely different state and the volatility is not significant, but it can be adjusted based on market supply and demand. Third, it follows the development of the market and continuously adjusts the trend in order to better reflect its value.

Currently, almost all crypto assets in the market, apart from mainstream currencies, are in a downturn phase. In other words, the prices of most altcoins have been declining. Therefore, generally speaking, the rebound is often accompanied by a signal of price increase, which means the “high-level consolidation” phenomenon will gradually be magnified. Of course, this should also be considered in relation to other mainstream currencies, such as BNB and OKB, which have not performed well in the past week. Therefore, in the next few days, we may see more coins showing a slight upward trend.