MACD Divergence occurs when the price of an asset moves in the opposite direction of the MACD indicator, signaling a potential shift in momentum. For example, if a stock's price makes a new high but its MACD indicator makes a lower high, this is a bearish divergence. MACD Divergence is a powerful technical analysis tool used to identify potential trend changes by comparing the price action of an asset with the momentum indicated by the Moving Average Convergence Divergence (MACD) oscillator. A 'bullish divergence' happens when the price forms a lower low, but the MACD forms a higher low, suggesting that the selling pressure is weakening and a reversal to the upside might be imminent. Conversely, a 'bearish divergence' occurs when the price makes a higher high, but the MACD forms a lower high, indicating that the buying momentum is fading and a downward reversal could be on the horizon. For instance, if Bitcoin's price rises to an all-time high but its MACD histogram shows declining momentum bars, a bearish divergence is present, alerting traders to consider taking profits or tightening stop-losses in anticipation of a potential correction.