Bitcoin gets a green light from a reliable momentum gauge. Here are key levels to watch
Bitcoin is showing signs of a bullish trend after a technical indicator known as the MACD histogram crossed above the zero line. Analysts suggest this indicates a potential recovery, though they emphasize the need to watch key resistance levels like the 50-day moving average.
Why it matters
This indicator provides traders with a data-driven signal for market momentum, helping investors navigate the volatility of the cryptocurrency market.
That’s the message coming from a popular technical indicator called the moving average convergence divergence (MACD) histogram , which oscillates around the zero line to show the direction and strength of the market trend. Crossovers above zero represent bullish shifts in momentum while crossovers below zero suggest otherwise.
The standard settings for the MACD use a 12-day and 26-day average, along with a 9-day signal line. However, these default parameters often generate short-term flip-flops and noise. To filter that out, many traders switch to longer parameters, such as the 50-day, 100-day, and 9-day settings.
This longer, smoother version of the MACD histogram has now crossed above zero, flashing a bullish shift in momentum. In plain terms, this means the longer-term momentum is turning positive. It suggests bitcoin’s recent gains could continue rather than fizzle out quickly. As of this writing, bitcoin is trading just above $64,000.
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