MACD Bitcoin Whipsaws & Fake Out Trading Signals on Bearish and Bullish Territory

The MACD is a leading tool that can give false signals. Look at this bitcoin trade example of a whipsaw from MACD. It shows why waiting for confirmation helps in crypto trades.

MACD Bitcoin Indicator Whipsaw Fakeouts

The MACD indicator showed a signal to buy bitcoin, and this cryptocurrency signal appeared when the MACD technical indicator line was still below the zero center line. At this point, the buy cryptocurrency signal had not been confirmed, and it led to a bitcoin whipsaw, as shown by the MAs, which kept going down.

A bitcoin trading whipsaw signal occurs due to a rapid rise and fall in the BTC/USD price within a short timeframe, which distorts the data used to calculate the moving averages that inform the MACD cryptocurrency indicator. Such whipsaw fakeouts are often triggered by news events or announcements that generate market noise.

Traders need to be able to understand a bitcoin trading whipsaw and be ready for its quick turns: a bitcoin trading whipsaw could lead to a session where prices rise and then fall. To lower the risk from whipsaws, it is smart to wait to be sure of btcusd signals by watching for MACD to go above or below the zero middle line.

Combining Together MACD Crossover with Centerline Crossover to Prevent Bitcoin Whipsaws

Buy bitcoin signal - When lines cross, and bitcoin price quickly goes up, then crosses a center line, the signal to buy cryptocurrency is confirmed.

Sell bitcoin trading signal - When there is a cross-over, followed by a steep decline in bitcoin price and then a center-line crossover the sell cryptocurrency signal gets to be confirmed.

1. Buy Bitcoin Signal in Bearish Territory Whipsaw

When a buy signal pops up in bearish territory, it can lead to a bitcoin whipsaw - especially if a MACD center line cross-over doesn't follow soon after.

In the example shown below, MACD cryptocurrency indicator gives and generates a buy cryptocurrency signal even though it is in bearish territory, MACD indicator then turns downward and starts heading down again resulting in to a bitcoin whipsaw. By waiting for center-line cross over it is possible to avoid the whipsaw.

However, in this instance there was a brief centerline crossing: this bitcoin trading whipsaw would have been difficult to trade using MACD cryptocurrency indicator alone, that's why it is good to combine the use of MACD technical indicator with another trading indicator. In the example illustrated below MACD is combined with the moving average cryptocurrency indicators analysis.

MACD Crypto Whipsaw - Buy Signal in Bearish Territory

2. Sell Bitcoin Signal in Bullish Territory Whipsaw

When a signal to sell cryptocurrency shows up while prices are rising, it might cause a bitcoin fake-out, mainly if the MACD doesn't soon cross the middle line.

In the trading example illustrated below, the MACD cryptocurrency indicator generates a sell cryptocurrency signal even though it is in bullish territory, the MACD cryptocurrency indicator then turns up and starts moving upwards again resulting in to a whipsaw. By waiting for center-line crossover it is possible to avoid the whipsaw. In the trading example illustrated below by combining this MACD technical indicator with the MA Moving Average Cross over Bitcoin Method you'd have avoided this whipsaw.

MACD Crypto Whipsaw - Sell Signal in Bullish Territory

To dodge bitcoin trading whipsaws with the MACD BTCUSD Indicator, stick to the Center Line Crossover Signal. Make that your official buy or sell signal - it's the most reliable one from the MACD Crypto Indicator.

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MACD Bitcoin Whipsaws & Fake Out Trading Signals on Bearish and Bullish Territory

Combining Together MACD Crossover with Centerline Crossover to Prevent Bitcoin Whipsaws