How to Use Divergence

If you like my graphics, share some 💙💛

In a bullish divergence, the RSI indicates the asset is oversold, forming higher lows, while the price action forms lower lows. This signifies a shift from selling pressure to buying interest. The sellers' last attempt to control the market is met with increasing buying volume.

Conversely, in a bearish divergence, the price achieves higher highs, reflecting the final push from buyers, while the RSI forms lower highs. This classic overbought scenario signals potential reversal as buyers lose momentum.