The BTC daily MACD turns red for the first time since bitcoin hit $20,000, recording its biggest red candle in history. Today, the selling continued and caused the MACD to go bearish as we can see more in today’s Bitcoin news.
This could be a sign that a short-term reversal is upcoming or that the top of the bull market is already here but what the moving average convergence divergence indicator says about the recent price action, we find out in our text below.
Bitcoin started off the year with a sharpest weekly advance and took the asset from $30K to $40K and this number is actually more than double of its former peak since the breakout from $10,000.The rally started and BTC didn’t turn back until now. the bulls were in control for months but the bears were hiding and attacked above the $40,000 which sent the cryptocurrency crashing by over $10,000. Yesterday we saw a record on the daily close in the asset’s short history. The fallout charged the bull trend bearish and imposed plenty of fear back to the crypto market.
The selling has continued since but the bulls were keeping the prices at bay and now they are consolidating. The selloff was enough to turn the MACD red on the histogram for the first time since BTC was reaching the $20K level. The BTC Daily MACD is a trend-following and momentum-measuring tool that consists of two moving averages that converge and diverge. Because of the way they function, it is disregarded by analysts as a “lagging indicator.”
Bitcoin’s MACD histogram is turning bearish after a $10,000 crash but this doesn’t actually discount its efficiency. The crossovers of the two MACD lines can act as one confirmation signal which solidifies that the trend is changing. Because the MACD is mostly focused on momentum and became elevated, the eventual correction will bring more gravity to it. The histogram turning red on the daily timeframes could extend further unless the bulls are able to uncross the two moving averages.
It’s important to note that technical analysis indicators have more weight added to them in higher timeframes so the momentum is still pointing upwards overall. To use the MACD effectively on the way up, confirmation of the bull trend is needed.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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