Hidden Bullish and Bitcoin Hidden Bearish Divergence Bitcoin Trading

Hidden divergence is used as a possible sign for a bitcoin trend continuation after the bitcoin price has retraced. It's a trading signal that the original bitcoin trend is resuming. This is best setup to trade because it is in same direction as that one of the continuing market trend.

Bitcoin Hidden Bullish Divergence

This setup happens when bitcoin trading price is making a higher low ( HL ), but the oscillator (indicator) is displaying a lower low ( LL ). To remember these setups easily think of them as W-shapes on Chart patterns. It occurs when there is a retracement in an upwards Bitcoin trend.

The example illustrated below shows an image of this bitcoin setup, from the image the bitcoin price made a higher low (HL) but the technical indicator made a lower low (LL), this portrays that there was a diverging trade signal between the bitcoin price & indicator. This signal portrays that soon the btcusd market up bitcoin trend is going to resume. In other words it displays this was just a retracement in an upward bitcoin trend.

This confirms that a retracement move is complete and indicates underlying momentum of an upward cryptocurrency trend.

BTCUSD Hidden Bearish Divergence

This setup happens when bitcoin trading price is making a lower high (LH), but the oscillator is showing a higher high (HH). To remember these setups easily think of them as M-shapes on Chart patterns. It occurs when there is a retracement in a downwards Bitcoin trend.

The example illustrated below shows an image of this bitcoin setup, from the image the bitcoin price made lower high (LH) but the indicator made a higher high (HH), this portrays that there was a divergence between the bitcoin price & the technical indicator. This portrays that soon the btcusd market down bitcoin trend is going to resume. In other words it displays this was just a retracement in a downward trend.

This confirms that a retracement move is complete & indicates underlying momentum of a downwards cryptocurrency trend.

Other popular indicators used are CCI indicator (Commodity Channel Index Indicator), Stochastic Oscillator, RSI and MACD. MACD & RSI are the best indicators.

NB: Hidden divergence pattern is the best type divergence pattern to trade because it gives a trading signal that is in the same direction with the current trend, thus the setup has a high reward to risk ratio. This setup provides for the best possible market entry.

However, a trader should combine this cryptocurrency trading setup with another indicator like the stochastic oscillator or moving average & buy when bitcoin is oversold, and sell when bitcoin is overbought.

Combining Hidden Divergence Pattern with Moving Average Crossover Strategy Method

A good indicator to combine these bitcoin trading set ups is the moving average indicator using the moving average crossover method. This will create a good strategy.

Moving Average Crossover Strategy Method

In this method, once the signal is given, a trader will then wait for the moving average cross-over method to give a buy/sell cryptocurrency trading signal in the same direction, if there's a bullish divergence setup between the bitcoin price & technical indicator, wait for the moving average crossover system to give an up-ward cross over signal, while for a bearish diverging setup wait for the moving average crossover strategy to give a downward bearish crossover signal.

By combining this cryptocurrency signal with other technical indicators this way one will avoid whip-saws when it comes to trading this bitcoin signal.

Combining with Bitcoin Fibo Retracement Levels

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

Because the hidden divergence setup is just a price retracement in an up-ward bitcoin trend we can combine this cryptocurrency signal with the most popular retracement tool that is the Fib retracement areas. The example illustrated below displays that when this cryptocurrency set up appeared on trading chart, bitcoin price had just hit the 38.2% level. When bitcoin price tested this level, this would have been a good level to set a buy order.

Combining with Bitcoin Fibo Expansion Levels

In the cryptocurrency trading example above once the buy bitcoin trade was placed, a trader would then need to calculate where to set the take profit for this trade. To do this a trader would need to use the Bitcoin Fibo Expansion Levels.

The Fibo expansion was drawn as shown on the btcusd chart as illustrated & shown below.

For this example there were three take profit areas:

Expansion Level 61.80% - 131 pips profit

Expansion Level 100.00% - 212 pips profit

Expansion Level 161.80% - 337 pips profit

From this strategy combined with Fibo would have provided a good strategy with a good amount of profit set using these take profit areas.