Why is RSI bearish divergence considered a bearish signal for cryptocurrencies?

3 answers

• TacoMay 13, 2023 · 3 years ago
  RSI bearish divergence is considered a bearish signal for cryptocurrencies because it indicates a potential reversal in the price trend. When the RSI (Relative Strength Index) diverges from the price action, with the RSI making lower highs while the price makes higher highs, it suggests that the buying momentum is weakening and a downward price movement may follow. This divergence indicates a shift in market sentiment and can be used by traders as a signal to sell or take a short position in cryptocurrencies.
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• Faraz KhanAug 23, 2021 · 4 years ago
  Bearish divergence in the RSI for cryptocurrencies is seen as a bearish signal because it reflects a divergence between the price and the momentum indicator. It suggests that the upward momentum in the price is losing strength, which could lead to a potential reversal or a downward movement in the price. Traders and investors often use this signal to make informed decisions about their positions in cryptocurrencies.
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• Marco AndruccioliFeb 16, 2023 · 3 years ago
  According to BYDFi, a leading cryptocurrency exchange, RSI bearish divergence is considered a bearish signal for cryptocurrencies due to its historical correlation with price reversals. When the RSI diverges from the price action and starts to decline while the price continues to rise, it indicates a potential shift in market sentiment and a possible upcoming downtrend. Traders often use this signal as a confirmation to sell or take a short position in cryptocurrencies, as it suggests a higher probability of a price decline.
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