Let's talk about this MACD death cross at $INJ 4 hours. First, let's clarify two shortcomings of the indicator:
First, lag. MACD is calculated using moving averages, so by the time a death cross appears, the price has usually already fallen some way from its high (24h -5.17%).
Second, it fails in sideways markets. In a range-bound market, golden and death crosses can keep appearing back and forth, creating plenty of noise.
Before this crossover, the opposing histogram bars lasted just 11 four-hour candlesticks—a relatively short time—so watch out for repeated crossovers. Also, since it's above the zero line, treat it as a correction for now; it doesn't necessarily signal a trend reversal.
First, lag. MACD is calculated using moving averages, so by the time a death cross appears, the price has usually already fallen some way from its high (24h -5.17%).
Second, it fails in sideways markets. In a range-bound market, golden and death crosses can keep appearing back and forth, creating plenty of noise.
Before this crossover, the opposing histogram bars lasted just 11 four-hour candlesticks—a relatively short time—so watch out for repeated crossovers. Also, since it's above the zero line, treat it as a correction for now; it doesn't necessarily signal a trend reversal.