Let's talk about the MACD death cross on the $AAVE daily chart. First, we need to clarify two shortcomings of the indicator:
First, it lags. MACD is derived from moving averages. When the death cross becomes visible, the price has usually already moved away from the peak by a certain amount (24h -4.33%).
Second, it fails in a choppy market. In a sideways range, golden crosses and death crosses will repeatedly appear, producing plenty of noise.
Before this crossover, the opposite-direction candles continued for 19 daily K-bars, so the trending leg has some length; it’s more reference-worthy than crossovers occurring within a range. Also, above the zero line, treat it as a pullback first—it's not necessarily a reversal.
NFA, do your own research.
First, it lags. MACD is derived from moving averages. When the death cross becomes visible, the price has usually already moved away from the peak by a certain amount (24h -4.33%).
Second, it fails in a choppy market. In a sideways range, golden crosses and death crosses will repeatedly appear, producing plenty of noise.
Before this crossover, the opposite-direction candles continued for 19 daily K-bars, so the trending leg has some length; it’s more reference-worthy than crossovers occurring within a range. Also, above the zero line, treat it as a pullback first—it's not necessarily a reversal.
NFA, do your own research.