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How does RSI divergence affect the price movement of cryptocurrencies?

avatarAlucard NemesisDec 26, 2021 · 3 years ago1 answers

Can you explain how RSI divergence impacts the price movement of cryptocurrencies? I've heard that it's an important indicator, but I'm not sure how it works specifically in the context of cryptocurrency trading.

How does RSI divergence affect the price movement of cryptocurrencies?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    RSI divergence is an important concept in cryptocurrency trading. It refers to the situation where the price of a cryptocurrency and the RSI indicator move in opposite directions. This can be a strong signal of a potential change in the price movement. When there is a bullish RSI divergence, it means that the price is making lower lows while the RSI is making higher lows. This suggests that the price might soon start to rise. Conversely, when there is a bearish RSI divergence, it means that the price is making higher highs while the RSI is making lower highs. This suggests that the price might soon start to decline. Traders often use RSI divergence as a part of their technical analysis to make informed trading decisions.