What is the difference between bearish and bullish divergence in the context of cryptocurrency trading?

3 answers

• Dec 16, 2021 · 3 years ago
  Bearish divergence occurs when the price of a cryptocurrency is making higher highs, but the corresponding indicator is making lower highs. This suggests that the upward momentum is weakening and a potential reversal or correction may be imminent. On the other hand, bullish divergence happens when the price is making lower lows, but the indicator is making higher lows. This indicates that the downward momentum is weakening and a potential trend reversal may occur. Both bearish and bullish divergence can provide traders with valuable signals to anticipate potential price reversals or continuations in the cryptocurrency market.
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• Dec 16, 2021 · 3 years ago
  Bearish divergence is like a red flag waving in front of a bull. It's a warning sign that the price may soon go down. On the other hand, bullish divergence is like a green light for the bulls. It indicates that the price may soon go up. Traders often use these divergences to make decisions about buying or selling cryptocurrencies. So, if you spot a bearish divergence, you might want to consider selling or shorting the cryptocurrency. And if you see a bullish divergence, it might be a good time to buy or go long on the cryptocurrency.
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• Dec 16, 2021 · 3 years ago
  In the context of cryptocurrency trading, bearish divergence occurs when the price of a cryptocurrency is rising, but the corresponding technical indicator, such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD), is showing a downward trend. This indicates a potential weakening of the upward momentum and a possible price reversal. On the other hand, bullish divergence occurs when the price is falling, but the technical indicator is showing an upward trend. This suggests a potential weakening of the downward momentum and a possible price reversal. Traders often use these divergences as signals to make trading decisions and manage their risk in the cryptocurrency market.
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