RSI Bitcoin Indicator Divergence Bitcoin Trading Setups

Bitcoin Divergence is one of the trade setups used by Bitcoin traders. It involves looking at a cryptocurrency chart and one more cryptocurrency indicator. For our example we shall use the RSI cryptocurrency indicator.

To spot this cryptocurrency trading divergence trading setup find two cryptocurrency chart points at which btcusd price makes a new swing high or a new swing low but the RSI cryptocurrency indicator does not, indicating a divergence between btcusd price and momentum.

RSI Bitcoin Divergence Example:

In the cryptocurrency chart below we identify two cryptocurrency chart points, point A and point B (swing highs)

Then using RSI cryptocurrency indicator we check the highs made by the bitcoin trading RSI indicator, these are the highs that are directly below the bitcoin Chart points A and B.

We then draw one line on the cryptocurrency chart and another line on the RSI cryptocurrency indicator.

RSI Divergence Bitcoin Trading Setup - Bitcoin Trading Divergence using RSI Crypto Indicator

How to spot bitcoin trading divergence

In order to spot this cryptocurrency trading divergence setup we look for the following:

HH=Higher High- two highs but the last one is higher

LH= Lower High- two highs but the last one is lower

HL=Higher Low- two lows but the last one is higher

LL= Lower Low- two lows but the last one is lower

First let us look at the illustrations of these bitcoin trading terms

Divergence Bitcoin Trading Terms Definition

Bitcoin Trading Divergence Terms Definition Examples

There are two different types of cryptocurrency trading divergence setups:

1. Classic Divergence
2. Hidden Divergence