Cryptocurrency MACD Divergence Meaning
MACD Bitcoin Trading Divergence is one of the bitcoin trading strategy used by online cryptocurrency traders to analyze bitcoin chart bitcoin price movement. MACD Bitcoin Divergence involves looking at a cryptocurrency chart & one more cryptocurrency indicator - MACD indicator. For our this cryptocurrency trading divergence tutorials we shall use the MACD indicator - MACD Cryptocurrency Divergence.
To spot this MACD bitcoin divergence trading setup find two bitcoin chart points at which bitcoin price makes a new swing high or a new swing low but the MACD cryptocurrency technical indicator does not do the same, thus indicating that there is a divergence between the bitcoin price & momentum.
MACD Bitcoin Divergence Example:
In the cryptocurrency chart below we spot two btcusd trading chart points, chart point A and chart point B (swing highs)
Then using MACD cryptocurrency technical indicator we check the highs made by the MACD technical indicator, these are highs that are direct below the Chart points marked A & B.
We then draw one line on the cryptocurrency chart & another line on the MACD technical indicator.
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How to trade MACD bitcoin divergence
In order to trade MACD bitcoin divergence set-up we look for the following set-ups:
HH - Higher High - two highs but the last one is higher
LH - Lower High - two highs but the last one is lower
HL - Higher Low - 2 lows but the last one is higher
LL - Lower Low - two lows but the last one is lower
First let us look at the example of these bitcoin divergence trading terms
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There are two different types of bitcoin trading MACD divergence setups:
- MACD Classic Divergence
- MACD Hidden Divergence
