The MACD (Moving Average Convergence Divergence) is a momentum indicator invented by Gerald Appel in the 1970s. It consists of three components: a MACD line calculated from the gap between two exponential moving averages (12 and 26 periods), a signal line (9-period average), and a histogram measuring the distance between them. In summer 2020, bitcoin’s weekly MACD gave a historic bullish signal while the price was stagnant around $10,000, heralding eighteen months of bull market until the November 2021 peak at $68,982. The indicator proves more reliable as the time unit used increases, with a weekly crossover carrying infinitely more weight than a 5-minute crossover. Gerald Appel himself described it as a context tool rather than a signal machine.
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