Divergence anyone?

Updated

Are these valid indicators that there will be bullish action in the near future? Please comment.

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Since not many care to comment, it appears divergence is an animal in its own right. This page will be dedicated to following divergence on ETH. It will help me and my followers understand divergence as it relates to ETHUSD.

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I would like to make it clear that my firm belief is both divergences above are classified as bullish divergences. But one must understand the effect of each for they do not result in the same outcome. Divergence 1 indicates a rising price scenario in overbought (and hence dropping) RSI. Therefore, the selling pressure from overbought territory will result in short term downtrend. The appearance of divergence in overbought or oversold territory can be ignored.

Divergence 2 occured in normal RSI conditions and needs to be taken seriously. The divergence is telling us of upcoming bullish action. Jump on board if you are a bull. Steer clear if you are a bear, The result of divergence 2 ended up sending ETH on a 2X price run in the following week or so.

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The above is divergence action on the four hour ETHUSD. This time, the glitch in the matrix (just what I like to call divergence) indicates upwards price action. I will update with the results of this action so we may understand this better.

Please comment/refute any ideas I may have so we can come to a better understanding.

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Also noteworthy is that big brother BTCUSD is showing the same divergence on the 4hr chart:

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Officially, I found out that an divergences connected at the two valleys (bottoms) are bullish while those that occur at the top are termed bearish. In short, the "Divergence 1" is termed as bearish divergence and the one on bottom i.e. "Divergence 2" is bullish.

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Last night, on the 15 minute chart, I noticed the following bearish divergence occur and predicted a drop to ETH price of 700 in public chat:

Sure enough, this morning, we are thrading right at around 700 and we had even dipped below the predicted 700 level. So the 700 was picked by closely following the price action in ETH (an educated guess).

brpatel

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