SOLANA - Divergence Breakout 🚀
What is Divergence?
Divergence indicates to us that a trend is losing momentum and could be ready for a reversal or a deeper correction soon. When we see divergence, we should stop trading in the direction of the trend and look for the trend to reverse.
How to identify Divergence?
When price is making higher highs, MACD (or RSI ) will show lower highs = Bearish Divergence
When price is making lower lows, MACD will show higher lows = Bullish Divergence
From September - November 2021 we saw bearish divergence. Price made higher highs while the MACD was making lower highs = indicating trend reversal. Price went on to crash over 60%.
Similarly, we saw another divergence recently. Price made lower lows but the MACD made higher lows = bullish divergence. Price went on to breakout and it is expected that the breakout will continue.
We are looking for any sort of corrections and/or retest of the structures indicated on the chart.
Goodluck!
Divergence indicates to us that a trend is losing momentum and could be ready for a reversal or a deeper correction soon. When we see divergence, we should stop trading in the direction of the trend and look for the trend to reverse.
How to identify Divergence?
When price is making higher highs, MACD (or RSI ) will show lower highs = Bearish Divergence
When price is making lower lows, MACD will show higher lows = Bullish Divergence
From September - November 2021 we saw bearish divergence. Price made higher highs while the MACD was making lower highs = indicating trend reversal. Price went on to crash over 60%.
Similarly, we saw another divergence recently. Price made lower lows but the MACD made higher lows = bullish divergence. Price went on to breakout and it is expected that the breakout will continue.
We are looking for any sort of corrections and/or retest of the structures indicated on the chart.
Goodluck!
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