# Simple moving average 4 years

### What is simple moving average

A moving average is widely used indicator in technical analysis that helps to smooth out the price action by filtering out the noise from random short-term price fluctuations. Simple moving average is basically an arithmetic average of observed periods periods:

SMA = (day1 + day2 + day3 + ... + dayN) / N

So, let's say we want to calculate SMA price for Bitcoin for 3 days:

SMA = (7.500 + 7.600 + 7.100) / 3 = 7.400

### Why is simple moving average important

Here for Bitcoin we calculate simple moving average for period od 4 years (1458 days). It means that for each day on the graph we sum prices for previous 1458 days and divide it by 1458 (arithmetic average). This period of 4 years is important with Bitcoin because this is the period between two halvings (time between blocks is 10 minutes and halving is happening every 210.000 blocks = 1.458,33 days). Halvings have significant impact in Bitcoin price because then cut daily prodution in half. During the history this SMA 1458 indicator has proven to be very good support for bitcoin price. It means that price never went below this value (actually it happend few times but it went back the next day).

_{(80)}

_{14:15}

_{CET}

There are two series on this graph:

- SMA1458d
- This is simple moving average value for last 1458 days.
- Price end of day
- Colored dots are representing daily actual price (end of each day). Price can be read on Y axis (left) and colors are representing difference of SMA1458d compared to the previous day. You can see color scale vertically on the right side of the graph with a range between 0 and 1%.

There are also 4 cards below the chart:

- Current SMA1458 delta
- This one shows difference in percent between last calculated SMA1458d value and value from the previous day.
- Price vs SMA1458 ratio
- We see here what is the difference between current SMA1458 and current price.
- Next halving estimate
- Shows the date next halving event is estimated to take place. This estimation is based on a fact that blocks are generated every 10 minutes in ideal case. As it has been already said in reality this is not happeing exactly every 10 minutes so this date is changing as time passes.
- Last update
- Block data is updated every 15 minutes and current price information every hour. After every update all values on the graph are recalculated. Date is in dd.mm.yyyy format and time zone is Central European. If you click on "CET" link in this box you will go to webiste showing current time in this timezone and some other major ones.

### Links and credits

This page is inspired by Medium article Modeling Bitcoin's Value with Scarcity written by Twitter user PlanB.

### Disclaimer

Any information found on this page is not to be considered as financial advice. You should do your own research before making any decisions.