Agree. Moving averages give us an idea about the short to long-term momentum within the market. For the hourly, I consider the 50 SMA to be the "short-term" moving average and the 200 SMA the long-term moving average. I always know to stay away from a trade if it's trading too far above the 50 SMA and I start to get a little suspicious if it goes too long without pulling in for a test of the 200. The SMAs also work great for signaling whether it's an opportune time to trade a breakout (from pattern or support/ resistance) or not.
You're right about the hourly and daily SMAs not matching. The number determines the "look-back" period, so the 200 SMA for the hourly accounts for the average of the last 200 hours while the daily accounts for the last 200 days.
Exactly. Thanks for the clarification. I think it helps those who may be newer to trading. I doubt we go right back to the 200 day SMA quickly, but could definitely see a bit of consolidation coming up allowing those SMAs to "catch up" a bit.
Happy trading!
Yes, in a strong bull market that would be the usual scenario for the 200 SMA test. We could form a symmetrical or ascending triangle (which bitcoin is famous for) allowing the 200 to catch up. The closer it gets, the more it supports a breakout of resistance.