A Simple Moving Average (SMA) is a statistical calculation used to analyze price trends over a specific period. It is calculated by taking the average price of an asset, such as a cryptocurrency, over a set number of days. This helps smooth out fluctuations in price, allowing traders and investors to better identify patterns.For instance, a 10-day SMA is calculated by adding up the closing prices of the last ten days and dividing by ten. As each new day passes, the oldest price drops out of the calculation, hence the term “moving.” People use SMAs to determine market trends and potential buying or selling opportunities. If the current price is above the SMA, it indicates a potential upward trend; if it is below, it may suggest a downward trend. Traders often look for crossovers, where a shorter-term SMA crosses above or below a longer-term SMA, as potential signals for entering or exiting trades. A common strategy is to use SMAs in combination with other indicators to increase the likelihood of informed decision-making.