Let's discuss this MACD golden cross on the $AVAX 4-hour timeframe. First, it's worth clarifying two limitations of the indicator:
First, lag. MACD is calculated from moving averages, so by the time a golden cross appears, the price has usually already risen some way from its low.
Second, it struggles in choppy markets. In a sideways market, golden and death crosses can appear repeatedly, creating a lot of noise.
Before this crossover, the opposing histogram bars continued for 18 four-hour candles, so the trend leg had some length and the signal was a bit cleaner than a crossover in choppy conditions. Also, since it occurred below the zero line, treat it as a rebound for now.
First, lag. MACD is calculated from moving averages, so by the time a golden cross appears, the price has usually already risen some way from its low.
Second, it struggles in choppy markets. In a sideways market, golden and death crosses can appear repeatedly, creating a lot of noise.
Before this crossover, the opposing histogram bars continued for 18 four-hour candles, so the trend leg had some length and the signal was a bit cleaner than a crossover in choppy conditions. Also, since it occurred below the zero line, treat it as a rebound for now.
