What are the differences between hidden divergence and regular divergence in the context of cryptocurrency trading?

1 answers

• Monster ManuDec 06, 2024 · 9 months ago
  Hidden divergence and regular divergence are two terms that traders often encounter in the context of cryptocurrency trading. While both types of divergence can indicate potential trend reversals, they have some distinct characteristics. Regular divergence occurs when the price of a cryptocurrency moves in the opposite direction of an indicator, such as the RSI. This can signal a weakening trend and a possible reversal. On the other hand, hidden divergence occurs when the price makes a higher high or lower low, but the indicator fails to do the same. This suggests that the trend is likely to continue. Traders can use regular divergence to identify potential trend reversals and hidden divergence to confirm the strength of an existing trend. By understanding the differences between these two types of divergence, traders can make more informed decisions in the cryptocurrency market.
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