What is the average daily velocity?

I don't quite understand what the average daily velocity represents.  For instance, when I look at the version report, my assumption is that it would use my average velocity (from sprint completions) in order to project.  For instance, if I mispointed a story to 80 and then moved it to 5 the next day, would this affect the daily velocity (even though this story was not part of a sprint).  

Just want to FULLY understand how the blue line is actually calculated on the report.

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why has noone from Atlassian answered this? 

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Good question Claire. A couple of Scrum Masters I work with have asked me this same question. Waiting...

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similar unanswered question here:  https://answers.atlassian.com/questions/38748656

This blog post has a theory about how it is being calculated, and why the prediction line will sometimes "bend":


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