Why are bullish divergences considered a positive sign for cryptocurrency prices?

1 answers

• Dec 26, 2021 · 3 years ago
  Bullish divergences are seen as a positive sign for cryptocurrency prices because they indicate a potential shift in market sentiment. When the price of a cryptocurrency is making lower lows, but the trading volume is decreasing or stabilizing, it suggests that the selling pressure is weakening. This can be interpreted as a sign that the downtrend may be losing steam and that buyers might enter the market. Traders pay attention to bullish divergences as they can provide early signals of a trend reversal and potential buying opportunities. However, it's important to remember that bullish divergences should not be relied upon solely for making trading decisions. Traders should use them in conjunction with other technical analysis tools and consider market conditions to increase the accuracy of their predictions.
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