Technical analysis
Divergence
A divergence appears when price and an indicator (like the RSI) move in opposite directions, hinting at a possible reversal.
A divergence appears when price and an indicator (like the RSI) move in opposite directions, hinting at a possible reversal.
For example, price makes a new high but the RSI makes a lower high: the rise is losing strength under the surface. Divergence is a warning, not a guaranteed reversal.
Price climbs to a new high, but the RSI falls: bearish divergence, caution.
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