CryptoWeeklies / Glossary

What is the 20-week moving-average risk level?

The 20-week moving-average risk level scores where a coin's price sits against its own 20-week moving average, from 0 (as far below it as the coin has been, bar the extremes) to 1 (as far above). It is the risk band on each coin's SMA risk chart.

How is the 20-week moving-average risk level calculated?

The 20-week moving average is the average of the last 140 daily closes. Two distances are measured from it every day: the gap in dollars (price minus the average) and the gap in proportion (price divided by the average, minus one). Each distance is clipped at its own 2nd and 98th percentile across the coin's history, so a single flash crash or blow-off wick does not stretch the scale, and then rescaled to run from 0 to 1 between those clips. The risk level is the average of the two.

How do you read the chart and its target table?

The chart colours every day's price by the tenth of the scale it fell in, from 0.0-0.1 to 0.9-1.0, with the 20-week average drawn as a dotted line. The target table works the formula backwards: for each level from 0.00 to 1.00 in steps of 0.05, the price today that would put the coin at that level, given today's 20-week average. At the lowest levels that arithmetic can produce a negative price, which means the level is out of reach today.

How is it different from the 200-week moving average?

Twenty weeks is about five months, so this line follows the medium-term trend and crosses price often. The 200-week moving average covers roughly four years and has historically sat near cycle lows. On this site the 200-week line is on each asset's Summary risk chart and, for stocks, its Composite SMA chart; the 20-week risk level is a separate, faster reading.

What can the 20-week risk level not tell you?

It compares a coin only with its own past, so the same level on two coins does not mean equal risk. A coin can stay near 1 through a long rally, or near 0 through a long decline. And because the clips are recomputed from the whole history on every update, a new extreme can shift past readings slightly. It describes where price sits, not where it will go.

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Model track records: every weekly reading the site published, beside what the price did next.

Weekly data: each week's published readings, dated and citable.