Stochastic Oscillator Bullish Bitcoin Divergence and Bearish Divergence Bitcoin Trading

Divergence bitcoin trading is one of the bitcoin trading signals that can be generated when using the stochastic oscillator cryptocurrency indicator.

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

There are 4 types of cryptocurrency trading divergence trading setups

Example 1: Classic Cryptocurrency Bullish Divergence

A Bitcoin Trading Classic Bullish Divergence in the stochastic oscillator indicator and the btcusd price is followed by a rise in cryptocurrency price.

Stochastic Oscillator Bitcoin Indicator Classic Bitcoin Bullish Divergence

When the btcusd price is making new lows the Stochastic cryptocurrency indicator is not moving past its previous lows it is an indication that the downward bitcoin trend is about to reverse and a bullish bitcoin trading rally is likely to occur.

In the cryptocurrency trading example above the btcusd price set a new low but it was not coupled with a new low in the measure of Stochastic oscillator cryptocurrency indicator, when btcusd price formed a new low then the stochastic cryptocurrency indicator should have followed suit, but the stochastic indicator did not therefore the bitcoin trading classic divergence trading setup.

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

Example 2: Classic Bitcoin Bearish Divergence

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

Stochastic Oscillator Crypto Indicator Classic Crypto Bearish Divergence

When btcusd price is making new highs but the Stochastic oscillator cryptocurrency indicator is not moving beyond its previous high it is an indication the upward bitcoin trend will reverse and that a bitcoin trading bearish divergence trade setup will follow.

This classic bitcoin trading bearish divergence trade setup is even stronger because there is a combination of a cryptocurrency trading divergence with a dip below the overbought 80 level.

Example 3: Hidden Cryptocurrency Bullish Divergence

Hidden Bitcoin Bullish Divergence trade setup signifies a retracement in an upward cryptocurrency trend. This bitcoin trading hidden divergence trading setup is the best type of cryptocurrency trading divergence setup to trade, because you are not trading a bitcoin price reversal, but you are trading within the direction of the Bitcoin trend.

Stochastic Oscillator Crypto Indicator Hidden Crypto Bullish Divergence

Even though, the stochastic oscillator cryptocurrency indicator made a lower low the btcusd price low was higher than the previous low (higher low). This means that even though the crypto sellers made a good attempt to push btcusd price down as indicated by the stochastic indicator, this was not reflected on the cryptocurrency price, and the btcusd price did not make a new low. This is the best place to open a buy bitcoin trade, since it is even in an upward bitcoin trend there is no need to wait for a confirmation bitcoin trading signal, because you are buying in an upward Bitcoin trend.

Example 4: Hidden Bitcoin Bearish Divergence

Hidden Bitcoin Bearish Divergence trading setup signifies a retracement in a downward cryptocurrency trend.

Stochastic Oscillator Crypto Indicator Hidden Crypto Bearish Divergence

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