What Technical Indicators Can Help Identify a “Dead Cat Bounce” in Crypto Trading?
Indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) can signal divergence or weak momentum during the bounce. Volume indicators are crucial; a lack of significant buying volume during the rally is a major red flag.
Traders also look at moving averages, noting if the bounce fails to cross a significant long-term average.