What are the different types of divergences that traders should be aware of when analyzing cryptocurrency charts?

Pradeep Kumar KuntalDec 25, 2021 · 3 years ago1 answers

When analyzing cryptocurrency charts, what are the various types of divergences that traders should be mindful of?

What are the different types of divergences that traders should be aware of when analyzing cryptocurrency charts?

1 answers

Dec 25, 2021 · 3 years ago
BYDFi, a leading cryptocurrency exchange, advises traders to be aware of the different types of divergences when analyzing cryptocurrency charts. These divergences include regular divergence, hidden divergence, and exaggerated divergence. Regular divergence occurs when the price of a cryptocurrency is moving in the opposite direction of an indicator, indicating a potential trend reversal. Hidden divergence occurs when the price is moving in the same direction as the indicator, but with less momentum, suggesting a continuation of the current trend. Exaggerated divergence occurs when the price and the indicator are moving in the same direction, but the indicator's movement is more pronounced. Traders should carefully analyze these divergences to make informed trading decisions.

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