Let's talk about this MACD death cross at $W 4 hours. First, let's clarify its two limitations:
First, lag. MACD is derived from moving averages, so by the time a death cross appears, the price has often already fallen some distance from its peak (24h -18.76%).
Second, it fails in choppy markets. In a range-bound market, golden and death crosses can appear back and forth, creating a lot of noise.
Before this crossover, the opposing histogram bars lasted only 7 four-hour candles—a short period—so beware of repeated crosses. Also, since it's above the zero line, treat it as a correction for now; it doesn't necessarily mean a reversal.
#W
First, lag. MACD is derived from moving averages, so by the time a death cross appears, the price has often already fallen some distance from its peak (24h -18.76%).
Second, it fails in choppy markets. In a range-bound market, golden and death crosses can appear back and forth, creating a lot of noise.
Before this crossover, the opposing histogram bars lasted only 7 four-hour candles—a short period—so beware of repeated crosses. Also, since it's above the zero line, treat it as a correction for now; it doesn't necessarily mean a reversal.
#W