Crypto markets with Bitcoin specifically, have been known as incredible markets for trend following strategies. In this article, we are going to be talking about an extremely popular trend following tool, the Moving Average Convergence Divergence, otherwise referred to as the MACD Indicator. What is the MACD? Moving Average Convergence / Divergence (MACD) The MACD is an extremely popular indicator used in technical analysis. It can be used to identify aspects of a security's overall trend. Most notably these aspects are momentum, as well as trend direction and duration. For now – notice how the trend of the MACD bar graph correlates to movement of the price of Bitcoin in US Dollars (BTC/USD). The peaks of the bar graphs seem to be good indicators for shifts in price.
Macd trading bitcoinMoving Average Convergence / Divergence (MACD) — Technical Indicators — TradingView
TP at top resistance as presented on chart. Expect pullbacks. Please comment with any thoughts and ideas. Thank you! The RSI is clearly in the bull zone. And we appear to be essentially parabolic at this point. I believe all these ideas predicting pullbacks at every level up to 20k, are going to result in us squeezing straight through to a new high.
Fundamentally, bitcoin is win-win at the moment. If coronavirus is cured and the markets propel forward on good economic recovery Presented is the 1 hr chart. This is a perfect scalping channel to gain profits off a current volatile market. Look for buy and sell opportunities from supports and rejections. A significant breach out of the channel may sentiment a new direction pattern. Current position is set up for Finding continued support.
All indications point towards upwards momentum to retest the current top resistance in this channel. A break of this support leads to the next support retest. Presented is a simple channel setup while we are bouncing between major low support with current channel high resistance. Pullbacks are significant in this zone as you can see on the chart.
My sentiment for this pair is entering sells at top resistance with rejection and entering buys at the major support with support confirmation. Current indicator sentiments The pair is at a key resistance. I am looking for continued rejection to drop to next key support as shown on chart. A retest of the top support is possible before a drop.
A break through top resistance will sentiment towards bullish trend continuation. Presented is a forecast based off the direction from. If there is a significant break look for a retest of. Finding rejection at top resistance. Line space arrows represent potential direction off TP 2 support zone. Stop loss with break of top resistance with continued trend. Looking for a sell opportunity with a top resistance rejection.
Using 2 am timeframe trend for the reversal I have mentioned in previous posts 2 am is often a strong pivot point time. If there is a significant break and close out above top resistance the trend may reach for the next resistance to retest. We have a significant breakout bar through a key support.
For a safer entry wait for a break and close below. Pullbacks may occur at tp 1 and. Read the chart for better understanding and please comment with thoughts and Presented is the 4 hr chart. We saw a bull breakout bar with a key resistance rejection following an exhausted bull trend. Based off price action rules a longer full pivot waiting period is occurring along the key resistance explained on the chart I will wait for a bearish Finding strong support on the 1 hour at MACD and signal made a smooth cross and heading towards 0 line to push upward momentum.
In its default form, it is a trend and momentum indicator that plots the relationship between the 12 period EMA and the 26 period EMA, and then applies a 9 period EMA to this value. Convergence and Divergence refers to when the 12 and 26 EMAs are moving closer together or further apart. The Signal line , or 9 period moving average of this value, gives us buy or sell signals depending on whether it is crossing above or below the MACD.
At the bottom of the chart you can see the MACD indicator. This value is then plotted to give us a representation of how far the moving averages are spaced apart. The idea being that a trend that is picking up in momentum will result in the moving averages diverging from each other, and the opposite for a trend that is losing steam.
The Golden line is the signal line, which gives us an idea of what the trend has been for the MACD values. As you can also see, there is a histogram plotted on the chart as well. The convergence and divergence between the MACD and Signal line are clearly seen in the histogram and can be used to help crypto traders identify bullish or bearish momentum.
For one thing, the MACD will spend much of its time favoring the values above the 0-line during bullish market environments and below during bearish market environments. This is like the concept of the 50 line for the RSI. So, at first glance, the MACD can be used to get a higher up view as to what the general market direction is. The other way we can use the MACD is as a simple trend-following tool to identify good entries and exits for higher timeframe trends.
The reason I say higher timeframe is because we normally see more false signals on the lower timeframe as the result of choppier behavior. This is also why the MACD is not as effective in ranging environments. If we are looking at the daily crypto chart and see that after putting in some type of bottoming structure, that price is now moving upward and the signal line has crossed from under the MACD line to above, and both are trading above the 0-line, then this may be a good signal to long that asset.
On the other hand, if price has been in a sustained uptrend , has formed some type of topping pattern, and now the Signal line is consistently maintaining position below the MACD line; it may be time to sell the position or consider shorting the market. The simple crossover with substantiating evidence of a topping pattern, are more often than not, good to act on alone without crossing the 0-line , because market reversals to the downside happen rather quickly and do not often allow for smoother entry.
If we have a trend that has continued upward printing higher highs in price action but lower highs in the MACD, or lower lows in the MACD but higher lows in price action; this may be a case for a divergence in momentum.