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How can divergence chart help in predicting cryptocurrency price movements?

avatarHélène RousseauNov 28, 2021 · 3 years ago1 answers

Can you explain how a divergence chart can be used to predict the movements of cryptocurrency prices?

How can divergence chart help in predicting cryptocurrency price movements?
Cryptocurrency
Divergence Chart
Price Movements

1 answers

  • avatarNov 28, 2021 · 3 years ago
    Definitely! Divergence charts can provide valuable insights into cryptocurrency price movements. By comparing the price of a cryptocurrency with an indicator, such as the RSI or MACD, traders can identify potential divergences that may signal a change in trend. For example, if the price of a cryptocurrency is making higher highs while the RSI is making lower highs, it could indicate a bearish divergence and suggest a potential price decline. However, it's important to note that divergence charts should not be used in isolation and should be combined with other analysis techniques and indicators for more accurate predictions.

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