In cryptocurrency trading, combining EMA (Exponential Moving Average), MACD (Moving Average Convergence Divergence), and RSI (Relative Strength Index) can help judge trends, momentum, and timing for buying and selling. The following is a comprehensive analysis method based on these three indicators:
1. EMA (Exponential Moving Average) - Trend Judgment
EMA gives more weight to recent prices, is more sensitive than Simple Moving Average (SMA), and is commonly used to identify trend direction and support/resistance levels.
Common Parameters:
Short-term EMA: 12-day or 20-day (reflecting short-term trends).
Long-term EMA: 50-day or 200-day (reflecting long-term trends).
Application Method:
Buy Signal:
Short-term EMA (such as the 12-day) crosses above the long-term EMA (such as the 26-day), forming a 'Golden Cross', indicating that the trend may turn upward.
Price rebounds after correcting to the EMA support level (such as the 20-day or 50-day EMA).
Note: In a strong upward trend, prices may rise along the short-term EMA (such as the 12-day EMA) and can be used as dynamic support.
2. MACD (Trend and Momentum Confirmation)
MACD combines trend and momentum, consisting of the fast line (DIF), slow line (DEA), and histogram.
Default Parameters: 12-day EMA (fast line), 26-day EMA (slow line), 9-day signal line.
Buy Signal:
Golden Cross: The DIF line crosses above the DEA line, and the MACD histogram turns positive.
Bottom Divergence: Prices make new lows, but the MACD lows rise, indicating weakening downward momentum.
MACD crosses above the zero line: indicates a market shift from bearish to bullish.
Note: MACD may frequently issue false signals in a sideways market, and should be filtered with other indicators.
3. RSI (Overbought and Oversold Momentum)
RSI measures the speed of price changes, on a scale of 0-100, commonly used to identify overbought and oversold conditions.
Common Parameters: 14 days.
Buy Signal:
Oversold Rebound: RSI < 30 (or custom set to 20) rebounds, indicating a potential bottom.
Bottom Divergence: Prices make new lows, but the RSI lows rise, suggesting insufficient downward momentum.
Breakthrough Trend Line: RSI breaking above the downtrend line may indicate a price reversal.
Note:
In a strong trend, RSI may remain in the overbought zone for a long time (e.g., >70), and simple overbought does not necessarily indicate a sell signal.
Used in conjunction with price trends (e.g., in an uptrend, focus on RSI correcting to the 40-50 support).
Comprehensive Strategy Example: Steps to Buy Cryptocurrency
1. Trend Confirmation:
Prices are above the 200-day EMA, and the short-term EMA (12) > long-term EMA (26), indicating an overall upward trend.
2. MACD Verification:
MACD shows a golden cross, and the histogram expands, indicating enhanced momentum.
3. RSI Position:
RSI rebounds from the oversold area (<30), or retreats to around 50 before rebounding.
4. Entry Timing:
Prices pull back to EMA support (such as the 20-day EMA) with decreasing volume, while MACD and RSI signals confirm.
Risk Control
Stop Loss: Set below the EMA support or recent low.
False Signal Filtering: Avoid blind trading during sideways consolidation (EMA entanglement, MACD close to the zero line).
Multi-Timeframe Verification: For example, if the 4-hour chart shows a buy signal, but the daily trend is still downward, caution is needed.
Case Study (Bitcoin Chart Analysis)
Assuming the current Bitcoin price:
EMA: The 12-day EMA (purple) crosses above the 26-day EMA (yellow), with prices above the 200-day EMA.
MACD: DIF and DEA golden cross, histogram turns red.
RSI: Rebounds from 35 to above 50.
Conclusion: Meets bullish conditions, consider building positions in batches.
Notes
Indicators have lagging characteristics and should be combined with trading volume, market sentiment (such as the Fear and Greed Index), and fundamentals (such as halving and policies).
Backtesting and historical data cannot guarantee future performance; it is recommended to test the strategy with a small amount of capital first.