Today, I’ll only talk about one talisman that can help you survive in the crypto space—MACD Divergence. This is the 'life-saving trick' I pulled from the wreckage of the market after three liquidations and losing 8 million.


Recalling 2021: BTC surged to 69,000, almost leading to liquidation

In 2021, when BTC surged to 69,000, I was fully leveraged on long positions, with unrealized gains of 4 million. The group was shouting 'breakthrough 100,000', and everything seemed to be heading towards the peak of a bull market. At that time, the voices of greed were incessant and the market atmosphere was high. But I noticed that the MACD red energy bars were getting shorter and shorter; although prices were continuously hitting new highs, the energy bars were half as short.

At 3 AM, I suddenly recalled the lesson from three years ago—ETH's crash. At that time, the energy bars were also shortening, and I didn't liquidate in time, resulting in a disastrous loss. At that moment, I knew: the top divergence had arrived.

So, I decisively liquidated my position, and the next day BTC plummeted 58%, causing many to be liquidated and wailing nonstop. Looking back now, that moment, the MACD divergence gave me the most important signal.

What is a Top Divergence?

Top Divergence is when prices hit new highs, but the length of the MACD red energy bars is getting shorter. Even if prices continue to rise, the buying power behind it is weakening. This is the whales 'distributing', while you are still blinded by the market’s rise.

The Bottom Divergence of LUNA's Zeroing in 2023

In 2023, the market was criticizing LUNA as a 'pyramid scheme coin', and everyone was fleeing. However, I saw the signal of a bottom divergence in the weekly chart—prices hit new lows, but the green energy bars were 60% shorter than the previous low. This signal told me that the downward momentum was weakening, the market was bottoming out, and the whales started accumulating.

I saw this opportunity and built my position in three batches. Although market sentiment was extremely low at the time, I held on during the panic period, and as a result, the rise of the RWA concept the following year earned me 3 million.


The Practical Significance of Top and Bottom Divergence

Top Divergence: Prices hit new highs, and MACD energy bars shrink, indicating weakening upward momentum. It’s time to be cautious; a correction may be on the way.

Bottom Divergence: Prices hit new lows, and MACD energy bars shrink, indicating insufficient downward momentum. It’s a signal to enter, as the bottom is about to reverse.

Last year, when DOGE surged to 0.35, I saw the MACD energy bars shrink to 30% of the previous high. I decisively liquidated my position, avoiding a 70% crash. Everyone rushed in when they saw the golden cross, but that’s a recipe for getting rekt. The real opportunity comes at the second golden cross: when both the 30-minute and 4-hour MACDs show a golden cross, and the on-chain large transfers are three times the average, that’s a strong signal.

10 Years of Blood-Tested Trading Rules:

Three Time Period Resonance: The 30-minute sets the direction, the 4-hour assesses strength, and the daily locks the trend. The three combined can provide the most accurate trading signals.

Top Divergence + Large Whale Net Outflow: When you notice a top divergence and large whale net outflow exceeds 5 million USDT, immediately cut your position. The market often 'distributes' at this moment.

Bottom Divergence + Long/Short Ratio below 0.7: When a bottom divergence appears and the long/short ratio is below 0.7, enter the market then. During market panic, it is your best time to enter.

From Liquidation to Explosion: MACD Divergence Saved Me

That day when I was liquidated for 8 million, I covered the K-line chart and stared at 10 sets of divergence cases every day until my eyes blurred. Now, I can feel the changes in the energy bars even with my eyes closed. It has become my muscle memory, helping me avoid countless risks.

MACD divergence is the mirror of the whales. Understand it, and you can perceive the market's true intentions. It tells you whether the market is accumulating or distributing, helping you survive in the crypto space.

Summary:

MACD divergence is not just a simple technical indicator; it is the key to your survival in the crypto space. Understanding and mastering it will greatly increase your chances of survival in the market and avoid being 'cut like chives'.

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