I became a little excited when I looked at the MKRBTC (Maker) chart, so many signals, so much to learn and explain. My mind was racing writing continually everything that I was going to share with you.
Then I moved to open the MACD and saw a set of higher lows.
MKRBTC in the same period has been printing lower lows and this brought back some memories… So forget the other signals, let’s go with this one.
Even though I haven’t been looking for this signal for a long while, If you’ve been with me in the past you know that this is one of the strongest of all.
We looked at divergences so often and with amazing results. It literally made us rich.
Let’s get started, we will need three charts. MKRBTC, its MACD and RSI.
- This is the chart for MKRBTC and you can see how from October 2021 we have lower lows until January 2023.
- Lower we can find the MACD and RSI, two of the most widely used indicators. We will have to zoom in.
- This indicator here is the MACD with default settings. Notice how since the October 2021 low it has been moving higher and in January 2023 printed a higher low.
We have lower lows when looking at MKRBTC and higher lows when looking at the MACD. That’s call a bullish divergence. The indicator diverge with the main chart/pair we are looking at in that one is moving higher while the other is moving lower.
This is a bullish signal… Now the RSI:
- The same. The RSI has been printing higher lows while the main pair prints lower lows.
When the signal shows up in more than one indicator, it gives it further strength.
The fact that we have a long-term bullish divergence with the MACD and RSI tells us that MKRBTC is getting ready to grow or at least there is potential for prices to move higher.
In isolation, this signal has no value but, in the context of the broader market while also looking at additional signals it can be really valuable.
For example, we can see MKRBTC trading above EMA50 and EMA100 on the 3D timeframe chart.
We can see that this pair is already trading above its March and October 2021 support levels, together with the bullish divergence, a bullish MACD and RSI, we can say that this pair is ready to go up.
In fact, it has already been growing, we see a continuation taking place and this is more than enough.
You only need 3-5 strong signals to support whatever bias you hold.
After you have the signals, define some support and resistance levels and you are ready either to watch and see how things develop or to buy and hold.
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