Is the monthly MACD water golden cross + the moderate enlargement of the weekly volume a bull market signal?

A monthly MACD water golden cross combined with rising weekly volume suggests a potential bullish shift in crypto markets, historically signaling possible long-term rallies.

Jul 03, 2025 at 06:01 pm

Understanding the MACD Water Golden Cross

The MACD (Moving Average Convergence Divergence) is a widely used technical indicator in cryptocurrency trading. A "water golden cross" refers to a specific configuration where the MACD line crosses above the signal line after being deeply negative, indicating that bearish momentum may be weakening.

In the context of monthly charts, this signal gains more weight due to the longer time frame. A monthly MACD water golden cross suggests that long-term sentiment might be shifting from bearish to bullish. However, it should not be interpreted as a standalone signal without additional confirmation from other indicators or chart patterns.

Weekly Volume Enlargement: What Does It Mean?

Volume plays a crucial role in confirming price movements and trend reversals. When analyzing weekly charts, a moderate enlargement of volume typically indicates increased participation from traders and investors.

This increase in volume, especially when aligned with a positive price movement, often signals growing confidence in the market. In the crypto space, where volatility is high, a steady rise in weekly trading volume can serve as a precursor to a new uptrend. It shows that buying pressure is increasing, potentially supporting the bullish implications of the monthly MACD signal.

Combining Monthly MACD and Weekly Volume Signals

Using both the monthly MACD water golden cross and weekly volume expansion together provides a more robust analytical framework. The monthly signal sets the stage for a potential trend reversal, while the weekly volume confirms that the market is starting to act on that possibility.

• Monthly Chart: Look for the MACD line crossing above the signal line after a prolonged downtrend.
• Weekly Chart: Observe whether the recent candlesticks show an increase in volume compared to previous weeks.
• Price Action: Check if the price has started to break key resistance levels or stabilize above critical moving averages.

These combined elements suggest that institutional or long-term investors may be entering the market, laying the groundwork for a bull run.

Historical Precedents in Cryptocurrency Markets

Looking back at historical data from major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), there have been instances where similar technical setups preceded significant rallies.

For example:

• In early 2019, Bitcoin experienced a monthly MACD water golden cross, followed by a gradual increase in weekly volume. This eventually led to a substantial rally later in the year.
• A similar pattern emerged in late 2020, where the combination of MACD and volume signals coincided with the beginning of a strong bull market.

It’s important to note that these signals do not guarantee future performance but rather indicate a higher probability of a bullish scenario when observed together.

How to Trade This Signal in Crypto Markets

If you're considering acting on this dual signal, here's a step-by-step guide tailored for crypto traders:

• Identify the monthly MACD water golden cross: Use platforms like TradingView to plot the MACD on the monthly chart and look for the crossover after a deep negative zone.
• Confirm with weekly volume: Switch to the weekly chart and compare current volume levels with the past 10–20 weeks. A noticeable uptick is a good sign.
• Look for price confirmation: Ensure that the price isn’t stuck in a tight range. Ideally, you want to see breakout attempts or retests of key resistance levels.
• Set entry points: Consider entering gradually, perhaps starting with a small position once the signals align and adding more if the price continues upward.
• Place stop-loss orders: Even with strong signals, risk management is essential. Place stops below recent swing lows or key support zones.
• Monitor ongoing volume and momentum: After entry, continue observing volume and momentum indicators to assess strength and sustainability.

This approach allows traders to participate in potential upside while managing downside risks effectively.

Potential Pitfalls and False Signals

Despite their usefulness, both the monthly MACD water golden cross and weekly volume increases can produce false positives. In highly volatile markets like crypto, short-lived rallies are common and may not lead to full-blown bull runs.

• Whipsaws: Sudden reversals after a promising start can trap traders who rely solely on technical indicators.
• Lack of fundamental catalysts: Sometimes, even with strong technical signals, the absence of real-world adoption or macroeconomic support can stall a rally.
• Market manipulation: Large players can influence price and volume, creating misleading signals that mislead retail traders.

Therefore, it’s vital to use these tools in conjunction with broader market analysis, including on-chain metrics, macroeconomic trends, and project-specific developments.

Frequently Asked Questions

Q: Can the monthly MACD water golden cross occur during a bear market?

Yes, it can appear during a bear market as a reversal signal. However, it doesn't immediately confirm a bull market—it only suggests a potential shift in momentum that needs further validation.

Q: Is moderate volume increase enough, or should I wait for explosive volume growth?

Moderate volume increase can still be valid, especially in early stages. Explosive volume is ideal but may come later. Moderate growth indicates consistent interest rather than panic buying.

Q: How long does it usually take for a bull market to develop after these signals align?

There’s no fixed timeline. Some rallies begin within weeks, while others may take months to materialize. Patience and continuous monitoring are key.

Q: Should I apply this strategy to all cryptocurrencies or only major ones like BTC and ETH?

Major cryptocurrencies tend to provide more reliable signals due to higher liquidity and market depth. Altcoins can give false signals more frequently due to lower volume and manipulation risks.