Trade Bitcoin Trading

Stochastics Indicator Technical Bullish Bitcoin Divergence and Bearish Divergence Bitcoin Trading

Divergence bitcoin trading represents one of the bitcoin trading signals that can be found and made when utilizing the stochastic oscillator bitcoin indicator.

Divergence bitcoin trading is a signal that a rally or retracement is losing steam and is likely to reverse. It means that last buyers or last sellers are pushing bitcoin price in one way while majority of other btcusd traders have stopped trading in that direction & are cautious of a btcusd price correction or pull back.

4 types of divergence trade setups explained

Example 1: Classic Bullish Divergence Trading Setup

A bullish divergence detected in the stochastic indicator for Bitcoin Classic, coinciding with the Bitcoin price action, is typically followed by an upward trajectory in Bitcoin's value.

Stochastic Bitcoin Indicator Classic Bullish Divergence

Stochastic Oscillator Technical Bitcoin Indicator Classic Bitcoin Bullish Divergence

If Bitcoin keeps hitting new lows, but the Stochastic indicator isn't dropping lower too, that's a big clue. It signals that the downtrend could be running out of steam and a bullish rally might be just around the corner.

In one example above, Bitcoin's price set a new low, but this was not mirrored by a corresponding low in the Stochastic Oscillator indicator. When a divergence like this occurs - where the Stochastic indicator doesn't match price movement - it may signal a potential trading setup based on classic divergence analysis.

Bitcoin classic divergence trading setup pattern is even stronger because there is combination of a divergence bitcoin trade setup and then followed by a rise above the 20 % trading indicator level. This combines the Overbought and Oversold levels with this trade divergence trade setup.

Example 2: Classic Bitcoin Bearish Divergence

A Classic Bitcoin Bearish Divergence trading setup in the stochastic oscillator indicator and the bitcoin price is followed by a drop in bitcoin price.

Stochastic Bitcoin Indicator Classic Bearish Divergence

Stochastic Indicator Classic Bearish Divergence Trade Setup

When the price of bitcoin reaches new high values, but the Stochastic oscillator indicator does not go higher than its previous high, it suggests the bitcoin trend will reverse, and a bitcoin bearish divergence trade will likely happen.

This standard bearish divergence setup in Bitcoin trading gains more power from the mix of divergence and a drop under the overbought line at 80.

Example 3: Hidden Bullish Divergence

A hidden bullish divergence in Bitcoin signals a pullback in an uptrend. This setup is the best divergence to trade. It lets you trade with the Bitcoin trend, not against it by betting on a reversal.

Stochastic Bitcoin Indicator Hidden Bullish Divergence

Stochastic Indicator Hidden Crypto Bullish Divergence

Despite the stochastic oscillator indicator registering a lower trough, the actual low point achieved by the Bitcoin price was demonstrably higher than the preceding low (resulting in a higher low: HL designation). This signifies that although cryptocurrency sellers made a determined effort to suppress the Bitcoin valuation, as indicated by the stochastic movement, this downward pressure was not mirrored in the realized Bitcoin price, which failed to establish a new absolute low. This specific scenario represents the superior juncture to initiate a purchase order for Bitcoin, particularly since the market is already situated within an upward trajectory, thus negating the need for a passive wait for a confirmatory Bitcoin trading signal before executing a buy within a prevailing upward Crypto trend.

Example 4: Hidden Bitcoin Bearish Divergence

A trading scenario known as Hidden Bearish Divergence suggests an impending pullback within an otherwise declining price trend.

Stochastic Bitcoin Indicator Hidden Bearish Divergence

Stochastic Trading Indicator Hidden Crypto Bearish Divergence

Hidden bitcoin trading bearish divergence setup is the best type of divergence to trade, because you're not trading a bitcoin price trend reversal, but you're trading within the direction of the trend. This is the best place to open/execute a sell bitcoin trade, since it is even in a downward bitcoin trend there's no need for you to chill and wait for a confirmation bitcoin trading signal, because you are selling in a downward Bitcoin trend.

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