A key price indicator has turned bullish for ethereum on the long term chart of weekly price candles.
MACD, which looks at momentum and trend direction over weekly periods in this case, has crossed over from a downwards trend to an upwards trend.
As you can see above this key indicator crossed over in December 2018 when ethereum reached a bottom and headed off for $324.
Then profit taking made the bullish blue line fall under the red one in July when price was $220.
It then went to fall to $115 to turn again, reaching $170 on Tuesday and so making bullish blue just about cross over the red bear.
As this is over a long weekly period, it does have weight for investors that have a lot of patience as it changes calculations over whether to jump in or otherwise.
The price however is unpredictable so this golden cross doesn’t necessarily mean a continued bullish rise, but it might do.
“What makes MACD so informative is that it is actually the combination of two different types of indicators,” Tradingview says before adding:
“First, MACD employs two Moving Averages of varying lengths (which are lagging indicators) to identify trend direction and duration.
Then, MACD takes the difference in values between those two Moving Averages (MACD Line) and an EMA of those Moving Averages (Signal Line) and plots that difference between the two lines as a histogram which oscillates above and below a center Zero Line.
The histogram is used as a good indication of a security’s momentum.”
Basically the indicator says that price has been rising for a sufficiently long time that it is likely it will continue to rise more, or if it has been falling then that it will continue to fall.
Contrarian traders might however bet against it, so making it do the opposite for a bit, but since this is weekly candles then in a semi-long term you’d expect raw supply and demand to be on the driving wheel with demand clearly gaining a boost after bitcoin – and thus by association others like it – graduated as a safe haven asset.
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