Definition ∞ Moving averages are technical analysis indicators that smooth out price data over a specific period by calculating a constantly updated average price. These averages help to identify trends, support, and resistance levels in financial markets, including digital asset markets. By removing short-term fluctuations, moving averages provide a clearer picture of underlying price direction. Traders and analysts use them to make informed decisions about market movements.
Context ∞ Moving averages are commonly referenced in cryptocurrency market analysis and trading news, often appearing in reports on price trends and potential market reversals. Discussions frequently involve different types of moving averages, such as simple or exponential, and their efficacy in predicting future price action. Their utility in signaling market shifts makes them a fundamental tool for participants.
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