Let’s talk about this MACD death cross at $US 4 hours. First, it’s important to understand its two limitations:
First, it lags. MACD is derived from moving averages, so by the time a death cross appears, the price has often already fallen some distance from its high (24h -40.29%).
Second, it’s unreliable in choppy markets. In a sideways market, golden and death crosses appear repeatedly, creating a lot of noise.
Before this crossover, the histogram bars in the opposite direction continued for 25 four-hour candles. That’s a reasonably long one-way move, so this cross may be more informative than one during choppy trading. Also, since it’s above the zero line, it’s best viewed as a correction for now—not necessarily a trend reversal.
First, it lags. MACD is derived from moving averages, so by the time a death cross appears, the price has often already fallen some distance from its high (24h -40.29%).
Second, it’s unreliable in choppy markets. In a sideways market, golden and death crosses appear repeatedly, creating a lot of noise.
Before this crossover, the histogram bars in the opposite direction continued for 25 four-hour candles. That’s a reasonably long one-way move, so this cross may be more informative than one during choppy trading. Also, since it’s above the zero line, it’s best viewed as a correction for now—not necessarily a trend reversal.