ADAUSD Explaining The Moving Average
Updated
Important things to note:
There is an important 50MA test about to happen.
A moving average is usually the average closing price of an asset in a certain amount of time.
Prices use moving Averages to perform tests of a price level.
Usually before a break across a moving average line, the price will test MA at a prior time hinting that it will try to cross.
This is why I want to see a test of the 50MA.
Tests of a MA can produce a bounce, or if a cross occurs, it can shift sentiment either bullish or bearish.
Take a look at the examples I have shown of the price testing the MA, then crossing.
This is a good way to back up your price targets.
Important Dates to Take Note of:
ADA Summit Sep 25-26 2021 (likely to produce more important dates)
Since I am waiting to see what happens with this test (if it happens at all). I wanted to explain why I find it so important. Lets just start off with 1 moving average, the 50MA on the 1D chart. This takes the average closing price of ADA over 50 days. Tests of the MA can produce a bounce, tell you where the price wants to go, and can shift the sentiment if a cross of the MA occurs. It is a great way to add a little more information to your prediction on where a price is headed. Take a look at some of the examples I have made for you showing the price testing, As you can see, the price test, then crosses. Not all tests are successful, so keep that in mind. Whenever a price is below a moving average, you want it to push above the moving average so the sentiment will shift. There are different kinds of moving averages, and different ways to interpret them (you have probably heard of a golden cross or a death cross etc.). But lets keep it simple right now. I would like to see the 50MA tested with a wick that crosses the MA, letting me know it wants to cross. The only thing better than that will be a cross itself. This is just the first step for ADA however. It will still need to get above the 20MA to solidify its bullish sentiment and stop the asset from getting pushed around by the bears. Now, lets talk about the elephant in the room, which is overhead supply. You might know it as a big dome sitting at the top of BTC, ETH, ADA and many other assets right now. Though, that is a bearish sign, the on chain metrics I am seeing for BTC do not suggest a bearish scenario. What I see is long term holders buying, and moving their coins to cold storage. This is a bullish sign. They would not want to store their BTC if the price was going to go into a bear cycle, and the same goes for buying right now. They would not buy right now if we are headed in a bear cycle, they would wait. The reason I bring up a bear cycle is because the price goes too far down, it will suggest a bear cycle and nothing I see on chain suggests that. So, I hope that clears everything up for you! I will put out another chart when I see the results of the 50MA test. Thanks again everyone!!!
Also, it is worth mentioning that TradingView has reached out to me and offered me very kind words, and showed me some support. I thought that was very nice of them and it was very unexpected. Though, I never planned for any of this to happen at all. I was constantly making charts for myself and my friends and some of them suggested I post them publicly. I never imagined any of this would happen, if I did, I would have waited until I had a bit more free time LOL. However, it makes me really happy to know that people are learning from my charts and hopefully it will encourage you all to learn technical analysis for yourselves! In a couple weeks I will have more time to make the educational content you have been asking for, and I will likely chart a wide spectrum of assets. Thank you again for all of the support, it means more to me than you know!
Now for some good news. As a person who follows ADA closely, I know that the adoption of the platform will happen very quickly with the release of smart contracts on the 12th of September. In fact, I think it was built with such a great foundation, I might just do an entire post on the fundamentals of Cardano sometime in the future. Pretty soon, we will see NFTs being created, DeFi, applications being developed, and overall strong adoption of the ADA blockchain platform as a whole. If there will be any immediate reason for ADA to move higher, it will likely be news coming from the summit on the 25-26 of September. So I would keep an eye on their twitter accounts around that time.
Again, I apologize for having less time to post at the moment, but that will change in a couple weeks.
I am going to make a video soon teaching everyone my approach to charting. I will cover the entire workflow process I go through. I hope you enjoy it.
Tell me what you think?
This is not financial advice. DYODD.
There is an important 50MA test about to happen.
A moving average is usually the average closing price of an asset in a certain amount of time.
Prices use moving Averages to perform tests of a price level.
Usually before a break across a moving average line, the price will test MA at a prior time hinting that it will try to cross.
This is why I want to see a test of the 50MA.
Tests of a MA can produce a bounce, or if a cross occurs, it can shift sentiment either bullish or bearish.
Take a look at the examples I have shown of the price testing the MA, then crossing.
This is a good way to back up your price targets.
Important Dates to Take Note of:
ADA Summit Sep 25-26 2021 (likely to produce more important dates)
Since I am waiting to see what happens with this test (if it happens at all). I wanted to explain why I find it so important. Lets just start off with 1 moving average, the 50MA on the 1D chart. This takes the average closing price of ADA over 50 days. Tests of the MA can produce a bounce, tell you where the price wants to go, and can shift the sentiment if a cross of the MA occurs. It is a great way to add a little more information to your prediction on where a price is headed. Take a look at some of the examples I have made for you showing the price testing, As you can see, the price test, then crosses. Not all tests are successful, so keep that in mind. Whenever a price is below a moving average, you want it to push above the moving average so the sentiment will shift. There are different kinds of moving averages, and different ways to interpret them (you have probably heard of a golden cross or a death cross etc.). But lets keep it simple right now. I would like to see the 50MA tested with a wick that crosses the MA, letting me know it wants to cross. The only thing better than that will be a cross itself. This is just the first step for ADA however. It will still need to get above the 20MA to solidify its bullish sentiment and stop the asset from getting pushed around by the bears. Now, lets talk about the elephant in the room, which is overhead supply. You might know it as a big dome sitting at the top of BTC, ETH, ADA and many other assets right now. Though, that is a bearish sign, the on chain metrics I am seeing for BTC do not suggest a bearish scenario. What I see is long term holders buying, and moving their coins to cold storage. This is a bullish sign. They would not want to store their BTC if the price was going to go into a bear cycle, and the same goes for buying right now. They would not buy right now if we are headed in a bear cycle, they would wait. The reason I bring up a bear cycle is because the price goes too far down, it will suggest a bear cycle and nothing I see on chain suggests that. So, I hope that clears everything up for you! I will put out another chart when I see the results of the 50MA test. Thanks again everyone!!!
Also, it is worth mentioning that TradingView has reached out to me and offered me very kind words, and showed me some support. I thought that was very nice of them and it was very unexpected. Though, I never planned for any of this to happen at all. I was constantly making charts for myself and my friends and some of them suggested I post them publicly. I never imagined any of this would happen, if I did, I would have waited until I had a bit more free time LOL. However, it makes me really happy to know that people are learning from my charts and hopefully it will encourage you all to learn technical analysis for yourselves! In a couple weeks I will have more time to make the educational content you have been asking for, and I will likely chart a wide spectrum of assets. Thank you again for all of the support, it means more to me than you know!
Now for some good news. As a person who follows ADA closely, I know that the adoption of the platform will happen very quickly with the release of smart contracts on the 12th of September. In fact, I think it was built with such a great foundation, I might just do an entire post on the fundamentals of Cardano sometime in the future. Pretty soon, we will see NFTs being created, DeFi, applications being developed, and overall strong adoption of the ADA blockchain platform as a whole. If there will be any immediate reason for ADA to move higher, it will likely be news coming from the summit on the 25-26 of September. So I would keep an eye on their twitter accounts around that time.
Again, I apologize for having less time to post at the moment, but that will change in a couple weeks.
I am going to make a video soon teaching everyone my approach to charting. I will cover the entire workflow process I go through. I hope you enjoy it.
Tell me what you think?
This is not financial advice. DYODD.
Note
I just spotted bearish divergence on the 4 hr chart.Note
I should also note that the divergence is rather small, and likely is reflecting the last retracement, I doubt it will be too profound, but I thought I would mention it if anyone wants to take a look on their own chart.Note
Ok last thing before I go to bed. I talk about on chain metrics all the time, you are probably wondering what I am talking about, or where I am getting the metrics. I get the metrics from Glassnode. I know the pro tier is very pricey, but there is still a lot of information you can get out of the free tier and it will help you understand important data sets. Once you learn more and accumulate a larger portfolio you can use the advanced tier to get data relevant to futures contracts. Anyways, I am not an affiliate and I have no interest in being one, I just thought you would like to know what I use.Note
Oh ya, goodnight everyone!
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