Mastering the Trade Setup Identification for Hidden Bullish and Hidden Bearish Divergences

Hidden divergence trade setup is used as a possible signal for a trend continuation after the price has finished retracing. It is a trading signal that the original BTCUSD market trend is resuming. This is the best divergence setup to trade because its market signal is in the same direction as that of the continuing price trend.

Hidden Bullish BTCUSD Divergence

Hidden bullish divergence forms when price hits a higher low. But the indicator shows a lower low. Picture it as a W on your chart. Easy to spot.

A "hidden bullish divergence" signal materializes when a price retracement occurs within an established upward trend for Bitcoin prices.

The image below shows a hidden bullish divergence. Price formed a higher low, but the indicator made a lower low. This signals hidden divergence between BTCUSD price and the indicator. It means the uptrend will soon continue after a pullback.

Hidden Bullish Divergence Trade Signal - BTCUSD Chart

This hidden signal that things are looking good shows that the price drop is done and that the price is likely to start rising again.

Hidden Bearish Bitcoin Trade Divergence

Hidden bearish divergence trade setup occurs when price is making a lower high (LH), but the indicator is showing a higher high (HH). To remember them easily think of and consider them as M shapes on price charts.

A hidden bearish divergence setup occurs when there is a pullback in a downward trend.

The example below shows a hidden bearish divergence. Bitcoin price formed a lower high, but the indicator hit a higher high. This gap points to a divergence between price and indicator. It means the downtrend will pick up soon. Put simply, it was a pullback in a falling market.

Hidden Bearish Divergence Setup Signal - BTCUSD Chart

This hidden bearish divergence setup ends a price pullback. It points to building downtrend power. Try CCI, Stochastic, MACD, or RSI tools. RSI and MACD stand out.

Note: The hidden divergence setup represents the most effective type of divergence signal for trading, as it aligns with the prevailing market price trend. This setup offers a favorable risk-to-reward ratio because it facilitates optimal entry points for initiating trades.

However, it is advisable to pair this setup with an additional indicator, such as the stochastic oscillator or the moving average crossover method. One should initiate a purchase when the trading indicator indicates that the BTC USD Crypto price is oversold and has exited this region, and conversely, sell when the indicator suggests that the Bitcoin price is overbought and has departed from this area.

Combining Hidden Divergence Trading Strategy with MA Crossover Technique

Combining hidden divergence setups with a moving average crossover strategy can help create reliable trading signals. This method also aids in confirming signals before executing trades.

MA Crossover Technique/Method - Bitcoin Strategies

In this strategy, once the divergence signal is given, a trader then will wait for the moving average cross over method to give a buy/sell signal in same direction:

• If there is a bullish divergence setup between the price & technical indicator, wait for the MA crossover method to give an upward cross-over signal before opening a buy position.
• While for a bearish divergence pattern wait for the MA crossover method to give a downward bearish cross over signal before opening a sell position.

Combining a hidden divergence setup with other indicators can help traders prevent whipsaw fakeouts while trading BTCUSD cryptocurrency.

Merging Hidden Divergence Trade Signals with Fibonacci Retracement Levels

For this example we will use an upward market trend. We shall use MACD indicator.

Hidden divergence acts as a pullback in an uptrend. Pair it with Fibonacci retracement levels, the top tool for spotting pullbacks.

The graphic below demonstrates that the price had just reached the 38. 2% Fibonacci retracement level when this concealed divergence pattern appeared on the BTCUSD price chart. This Fibonacci retracement level would have been a wise time to initiate a buy order if it had been price tested.

Integrating the Signal for Hidden Divergence Trades with Fibonacci Retracement Areas

Synergizing a Hidden Divergence Setup Signal with Fibonacci Expansion Levels

In the example illustration displayed above once the buy trade was opened, one would then need to calculate where to place their take profit order for this trade. To do this a btc/usd trader would need to use the Fib Expansion Levels.

The Fib extension levels were drawn on price chart as shown below.

Combining Hidden Divergence Trade Signal with Fibo Extension Areas

For this example there were three take profit order areas:

• Fibonacci Expansion Level 61.8 %
• Fibonacci Expansion Level 100.0 %
• Fibonacci Expansion Level 161.8 %

Mix hidden divergence with Fibonacci tools. Use retracement and expansion. Set profits at expansion levels. It can boost your trading gains.

Study More Tutorials & Courses:

• How One Can Engages in Trading a BTC USD Price Break-out Formation
• How to understand what a new Bitcoin order means in the MT5 BTC USD iPhone app.
• Bitcoin Candle Meanings
• Gann Swing Oscillator BTC USD Technical Indicator Analysis on Bitcoin
• MetaTrader 4 for Crypto Currency Platform
• Hidden Bullish Divergence: Unlocking Bitcoin Trade Opportunities
• Capability for Analyzing and Interpreting a Market Execution Order for BTCUSD