Let's discuss the MACD bullish crossover on the daily chart for $LIT . First, it's important to understand its two limitations:
First, lag. MACD is derived from moving averages, so by the time a bullish crossover appears, the price has often already moved some distance from its low (up 13.62% in 24h).
Second, it can fail in sideways markets. In a range-bound market, bullish and bearish crossovers can occur repeatedly, generating quite a few false signals.
Before this crossover, the opposing histogram bars lasted for 26 daily candles—a fairly long trend phase—so this crossover is cleaner than one in a choppy market. Also, since it is below the zero line, treat it as a rebound for now.
#LIT
First, lag. MACD is derived from moving averages, so by the time a bullish crossover appears, the price has often already moved some distance from its low (up 13.62% in 24h).
Second, it can fail in sideways markets. In a range-bound market, bullish and bearish crossovers can occur repeatedly, generating quite a few false signals.
Before this crossover, the opposing histogram bars lasted for 26 daily candles—a fairly long trend phase—so this crossover is cleaner than one in a choppy market. Also, since it is below the zero line, treat it as a rebound for now.
#LIT