Bitcoin's monthly MACD histogram, a lagging indicator, has turned bearish for the first time since May.A break below the recent low of $6,511 is needed to validate the MACD's bearish turn.
A widely followed long-term bitcoin chart indicator has turned bearish for the first time since May.The monthly MACD histogram, an indicator used to identify trend changes and gauge trend strength, has crossed below zero to indicate a bullish-to-bearish trend change in prices.
Some observers have called the MACD's bearish turn bad news for bitcoin.
The latest bear cross has limited predictive powers and is more a confirmation or result of the prevailing bearish trend as represented by the sell-off from the June high of $13,880 to the November low of $6,500.
"Even if we are about to interpret it as bearish, that is coming after a mover from $14K to $7k and is woefully late," Mr. Anderson said.
BTC dropped sharply in 2014 and 2018 following bearish crossovers of the histogram.
Back in 2014 and 2018, bitcoin was coming off record highs and, with the histogram's bearish turn, traders likely found a reason to take profits or sell the cryptocurrency.
Bitcoin charted a classic long-tailed hammer candle in the three days to Nov. 26, signaling bearish exhaustion near six month lows.
The monthly MACD's bearish reading would gain credence only if prices find acceptance below $6,511.
A drop below that level would validate an inverted bearish hammer created on Dec. 4 and likely invite stronger selling pressure leading to a drop to recent lows near $6,500.
Key Bitcoin Price Indicator Turns Bearish, But It May Not Be Bad News
Published on Dec 6, 2019
by Coindesk | Published on Coinage
Coinage
Mentioned in this article
Recent News
View All
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.