Trading & Technical Analysis

What is divergence in technical analysis?

Divergence in technical analysis is when an asset's price moves in one direction while a momentum indicator, such as RSI or MACD, moves in the opposite direction. It signals that the current trend may be weakening. For example, if a coin makes a higher high but RSI makes a lower high, that is bearish divergence, hinting buying pressure is fading. Divergence is a probabilistic signal, not a certainty, and it can persist for a long time before price reacts, so treat it as one input among many rather than a trigger on its own.

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