$SNDK Contract ยท How to use the MACD indicator? Convergence signals in a bearish trend
MACD is one of the most familiar indicators to many people, but most people use it incorrectly.
ใMACD consists of three partsใ
DIF line (fast line) = short-term EMA - long-term EMA
DEA line (slow line) = the average of DIF
MACD histogram (Hist) = DIF - DEA
Hist > 0 (red bars) = bullish momentum
Hist < 0 (blue bars/green bars) = bearish momentum
Hist converging from negative values toward 0 = bearish momentum is weakening
ใSNDKโs current MACD statusใ
4H MACD:
Hist = -6.18 (continuous convergence: -14.3 โ -9.7 โ -6.18)
โ bearish momentum isๆ็ปญ weakening, but the direction is still bearish
1H MACD:
Hist = +3.68 (golden cross, positive)
โ short-term bullish momentum appears, but RSI confirmation is weak
15M MACD:
Hist = -0.93 (just had a dead cross, turned negative)
โ the shortest timeframe has turned back bearish again
ใKey question: Does MACD convergence mean you should buy?ใ
Answer: Not equal to that.
MACD convergence only indicates โbearish momentum is weakening.โ
It does not mean โbullish momentum has already been established.โ
4H Hist = -6.18โstill a negative value!
You need to wait until Hist crosses from negative to positive (a golden cross),
then it indicates that bullish control truly takes over.
Right now, 4H still needs about 2โ3 more candles before a possible golden cross.
Before the golden cross, the price is still under bearish dominance.
Using MACD convergence to catch a bottom means using โweakening bearishnessโ as your bullish support.
Thatโs why bottom-picking often leads to getting trappedโconditions arenโt sufficient.
Technical indicator explanation, not investment advice.
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