The 200-day moving average (200-DMA) is a significant indicator used by traders and analysts to assess the long-term trend of financial assets, including cryptocurrencies like Bitcoin. It is computed by taking the sum of an asset's closing prices over the last 200 days and then dividing that sum by 200. This process helps in smoothing out short-term price fluctuations to provide a clearer view of the asset's long-term trend.
The 200-DMA is instrumental in identifying the long-term trend of Bitcoin. When Bitcoin's price is above its 200-DMA, it is considered to be in a long-term uptrend, and vice versa.
The 200-DMA often acts as a support or resistance level. When the price is above the 200-DMA, it may act as a support level, and when it's below, it may act as a resistance level.
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