MACD line: The difference between the fast-moving average and the slow-moving average

Signal line: Moving average of the MACD line to signal changes in the price momentum

Histogram: Shows the difference between the MACD line and the signal line

When the MACD line crosses above the signal line, then it is a bullish signal.

When the MACD line crosses below the signal line, then a bearish signal is determined.

A bearish MACD divergence occurs when an asset’s price makes a HH, but the MACD line or its histogram forms a LH. 

This mismatch signals weakening bullish momentum and suggests a possible upcoming price reversal to the downside.

A bullish MACD divergence happens when an asset’s price makes a Lower Low, but the MACD line or its histogram forms a Higher Low. 

This gap indicates waning bearish momentum and suggests a potential upcoming price reversal to the upside.

Bearish divergence: 

When the MACD line makes a higher high while the histogram makes a lower higher.

Bullish divergence: When the MACD line makes a lower low while the histogram makes a higher low.

This indicates a weakness in the current downward movement.