MACD (Moving Average Convergence Divergence) is a momentum indicator that shows the relationship between two moving averages (typically the 12-day and 26-day EMA) of an asset’s price. A bullish signal occurs when the MACD line crosses above the signal line, while a bearish signal happens when it crosses below. The MACD histogram highlights momentum strength, with a growing histogram indicating increasing momentum and a shrinking one signaling weakening momentum.