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Bitcoin MACD Chart

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Reading the MACD Chart

The MACD chart displays the momentum of an asset's price.
The main line (MACD line) is the difference between the 12-day and 26-day exponential moving averages (EMA).
The Signal line, a 9-day EMA of the MACD line, serves as a trigger for buy/sell signals.
When the MACD line crosses above the Signal line, it's a bullish sign, suggesting potential upward momentum.
A cross below indicates potential downward momentum.
The bars (Histogram) represent the difference between the MACD and Signal lines, visually emphasizing the strength and direction of momentum.

Purpose of MACD in Trading

Traders use MACD as it provides insights into the asset's momentum and potential trend reversals.
By observing crossovers and the Histogram, traders make informed decisions about entering or exiting positions.
The MACD's versatility in highlighting both trend and momentum makes it a favored tool among traders, helping to minimize risk and capitalize on potential profit opportunities.

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Article Sources

BuyBitcoinWorldWide writers are subject-matter experts and base their articles on firsthand information, like interviews with experts, white papers or original studies and experience. We also use trusted research and studies from other well-known sources. You can learn more about our editorial guidelines.

Investopedia - MACD Indicator Explained, with Formula, Examples, and Limitations, https://www.investopedia.com/terms/m/macd.asp

About the Author

Jordan Tuwiner

Jordan Tuwiner is the founder of BuyBitcoinWorldwide.com. He studied computer science at Towson University and holds an online degree in trading & cryptocurrency. Jordan has been writing about Bitcoin since 2015. His work has been featured in The Guardian, International Business Times, Forbes, VentureBeat, CoinDesk and many other top Bitcoin media outlets.