MACD Indicator Oscillator Bitcoin Trading Analysis FastLine & SignalLine
MACD Bitcoin indicator is used in various ways to give technical analysis information.
- MACD center line crosses indicate bullish or bearish markets: below zero is bearish, above zero is bullish.
- MACD Crossovers indicate a buy or sell trade signal.
- Oscillations can be used to indicate oversold & overbought regions
- Used to look for divergence between price and indicator.
Construction of MACD Crypto Indicator
The MACD cryptocurrency indicator is constructed using two exponential moving averages and this cryptocurrency indicator plots two lines. The two default exponential moving averages used are 12 and 26. Then a smoothing factor of 9 is also applied when drawing the MACD bitcoin technical technical indicator.
Summary of how MACD cryptocurrency indicator is drawn
MACD uses 2 EMAs + a smoothing factor (12, 26 Exponential Moving Averages and 9 smoothing periods)
MACD cryptocurrency indicator only plots two lines - the MACD fast line and the MACD signal line
MACD Lines - MACD Fast-Line and MACD SignalLines Trading Signals
- The FastLine is the difference between the 26 Exponential Moving Average and 12 EMA
- The Signal-line is the 9 period moving average of the MACD fast line.
Implementation of MACD Crypto Indicator
MACD cryptocurrency indicator implements the MACD line as a continuous line while the signal line is implemented as a histogram. These two MACD LINES are then used to generate cryptocurrency signals using the crossover trading strategy method.
There is also the MACD center line which is also referred to as the zero mark & it is a neutral point between buyers and sellers trading the btcusd trading market.
Values above the center-mark are considered bullish bitcoin trading signals while those below are bearish bitcoin trade signals.
The MACD cryptocurrency indicator being an oscillator indicator, oscillates above and below this center line.
