Bitcoin Hidden Bearish/Bullish Divergence
Updated
Hi Traders;
Hidden divergence is a signal for trend continuation. In this example, usually, that would mean continuation of selling, but we can see a couple of misleading signals.
Hidden divergence can be found during retracements in a downtrend which would indicate weakness. Price would form lower highs while the oscillator makes higher highs. (1,2,3 on the chart)
On the other hand, hidden divergence can be found during an uptrend. The price-oscillator correlation would be the same, but it occurs during a correction in an uptrend. It indicates strength from buyers.
This often occurs during consolidation within an existing trend and usually indicates that there is still strength in the prevailing trend.
Looking from a monthly perspective, we are trending to the downside grater part of September. That would indicate that we are in a short term downtrend which would mean continuation to the downside.
Examining the bigger picture (ytd), we are still in a valid uptrend. If this can be observed as a correction, that would mean a continuation of an uptrend.
Generally speaking, this divergence doesn't show much confidence in either bulls or bears, but it might strengthen the trend once we have a confirmation of the trend direction.
My confirmation will be the break and close above/bellow either trend line.
This has been my view and my opinion on the current market. I wish you good returns and good luck trading, cheers.
Hidden divergence is a signal for trend continuation. In this example, usually, that would mean continuation of selling, but we can see a couple of misleading signals.
Hidden divergence can be found during retracements in a downtrend which would indicate weakness. Price would form lower highs while the oscillator makes higher highs. (1,2,3 on the chart)
On the other hand, hidden divergence can be found during an uptrend. The price-oscillator correlation would be the same, but it occurs during a correction in an uptrend. It indicates strength from buyers.
This often occurs during consolidation within an existing trend and usually indicates that there is still strength in the prevailing trend.
Looking from a monthly perspective, we are trending to the downside grater part of September. That would indicate that we are in a short term downtrend which would mean continuation to the downside.
Examining the bigger picture (ytd), we are still in a valid uptrend. If this can be observed as a correction, that would mean a continuation of an uptrend.
Generally speaking, this divergence doesn't show much confidence in either bulls or bears, but it might strengthen the trend once we have a confirmation of the trend direction.
My confirmation will be the break and close above/bellow either trend line.
This has been my view and my opinion on the current market. I wish you good returns and good luck trading, cheers.
Note
Bitcoin close above the upper trend line which confirmed the direction of the trend.
First target is the zone 45,134-45,300 (between black and orange line).
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