How to Read the Market Using Two Moving Averages (Simple Explanation)

One of the most basic yet effective trend tools is the double moving average crossover.

The idea is simple:

we compare a short-term and a long-term moving average.

📈 Buy Signal

— the short-term MA crosses above the long-term MA

→ the market enters a growth phase

📉 Sell Signal

— the short-term MA crosses below the long-term MA

→ a downtrend begins

🧠 Popular Combinations

• 5 & 20 days — more sensitive, suitable for active markets

• 10 & 50 days — more conservative, better at filtering noise

⚖️ Important Nuance

This method is lagging — the signal doesn’t appear at the very start of a move.

But 👉 it reduces false entries and increases confidence that the trend is already established.

🎯 Alpha

Moving averages don’t catch exact tops or bottoms.

They help you stay in the move once the market has made its decision.

That’s why:

funds use them

systematic traders rely on them

they work especially well in the medium term

🚀 Looking ahead, as volatility increases, simple trend-following tools will become key again — especially for #BTC and major altcoins.

#bitcoin $BTC

BTC

89,411.83

+0.83%