A trading indicator in the bitcoin markets suggests the bottom may be in, according to one technical analyst. The two-week MACD of bitcoin crossed into a buy signal on Apr. 1st, the first time since May 11th, 2015, the bottom of the market before it exploded in 2016-2017.
Technical analyst Crypto Thies recently tweeted on Apr. 16 his organization entered into a position on bitcoin when the price was $4,000. His reasoning: bullish signals from two-week MACD.
Moving average convergence divergence, or MACD, is a trading indicator that shows the relationship between two moving averages of an asset’s price.
The 2W MACD has crossed in a buy signal on $BTC. We opened @ approx $4k.
The last time it happened? May 2015. #Bitcoin opened around $240.
We can still drop in accumulation, but the bottom is in ‘folks. pic.twitter.com/5X7Dc9qc5S
— Crypto Thies (@KingThies) April 16, 2019
The MACD indicator is calculated using two exponential moving averages (EMAs) which place greater weight on the most recent data, compared to a simple moving average (SMA) which applies an equal weight to all price data over a period.
Then, a moving average (EMA) of MACD is taken to produce a “signal line,” which can signal buy and sells. Traders typically buy when MACD crosses above its signal line and sell when it crosses below.
Check out Investopedia for the details on calculating MACD.
Two Week MACD Signals Bottom
As shown by charts provided by Crypto Thies, the two-week MACD has crossed into a buy signal for BTC:
As shown on the chart above,