There is a very strong signal in technical analysis that most people overlook: when the price and indicators move in opposite directions. We call this divergence, and it is one of the clearest messages the market gives us.

Basically, this happens: indicators make lows higher but the price is falling, or indicators make highs lower but the price is rising. These mismatches tell us something important. Positive divergence, which we call this situation, usually appears before the price starts to rise. Conversely, negative divergence tends to signal a decline.

When working with RSI divergence, one thing to pay attention to is: RSI looks at closing prices, so you need to evaluate divergence based on closing values. Similarly, you can work with other indicators like MACD, Bollinger Bands. Hidden divergences work a bit differently; they are generally more reliable when found in the middle regions of indicators.

One more important thing: divergence alone is not a reason to enter a trade. It is just a confirmation tool. You need to consider it together with other factors. For example, support-resistance levels, trend lines, volume, and so on. When you see RSI divergence, check if it coincides with other signals.

The basic rule when evaluating divergences is simple: when you see positive divergence, expect the price to rise; when you see negative divergence, prepare for a decline. But always remember, technical analysis is a game of probabilities. Divergences often work, but there are no guarantees. Risk management should always be the top priority. #crypto #btc