In the unpredictable world of the crypto market, learning to identify genuine signals is often the key to survival. Today’s topic is MACD divergence, an indicator that can help you sniff out risks and seize opportunities in advance—an experience earned through countless traders’ blood, sweat, and tears.

**Top Divergence: When Price and Momentum Go Against Each Other**

In 2021, when BTC surged to $69,000, the market was buzzing. But a close look at MACD reveals something strange: while the price kept hitting new highs, the corresponding red energy bars were shrinking, and the fast line was beginning to weaken. This phenomenon is called "top divergence"—the price pushes upward, but the underlying momentum can’t keep up, like flooring the accelerator but not gaining speed, signaling an imminent crash.

And indeed, that rally proved to be a warning. BTC then plummeted by 58%, sweeping out countless longs. The essence of top divergence is that the market makers are pushing the price up while offloading their holdings—what appears to be a rising price is just an illusion, while the real intent lies in the momentum.

The key points for identification are straightforward: be alert when the price hits new highs but the MACD bars shorten or the fast line moves downward; combining this with bearish candlestick patterns (long upper shadows, bearish engulfing) makes the signal even clearer—at this point, it’s time to exit decisively.

**Bottom Divergence: A Signal to Buy When Momentum Fades**

Conversely, during the darkest moments of LUNA’s crash in 2023, the market was crying out in despair. But a careful look at the weekly chart reveals that although the price continued to make new lows, the green energy bars did not expand further—in fact, they increased by 60% compared to the previous decline. This is called "bottom divergence"—momentum has already exhausted, and the subsequent decline is just inertia; the ball finally loses its bounce.

By combining on-chain data, it’s often possible to confirm that large whales are quietly building positions. Layered accumulation at this stage can lead to profits during subsequent rebounds.

The power of MACD divergence lies in its ability to reveal the true intentions of market makers and big players, rather than being fooled by the candlestick patterns seen with the naked eye. Mastering this technique will significantly increase your survival rate in the crypto market.