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Divergence

Negative Divergences Often Warn of Declines: Bitcoin & Gold Negative Divergences Often Warn of Impending Declines: Bitcoin Highlighted…. Is Gold Next? OTC:GBTC COMEX:GC1! INDEX:BTCUSD The CMT Association is proud to publish this guest post from Louise Yamada CMT. Louise was a Managing Director and Head of Technical Research for Smith Barney (Citigroup), and while there, was a perennial leader in the Institutional Investor poll and the top-ranked market technician in 2001, 2002, 2003 and 2004. Louise was the 2016 recipient of the CMT Association’s Lifetime Achievement Award. In these examples we use the moving average convergence divergence (MACD) indicator to illustrate the concept of divergence, to forensically evaluate Bitcoin and to make some forward looking observations on the gold market. Divergences: • Negative momentum divergences often warn of impending price consolidations or declines. • Divergence forms as price moves to a new high while the oscillator fails at a lower high, creating a negative divergence between the oscillator and price. • Divergences of this type suggest that the underlying momentum may be waning. Divergences carry different implications depending upon their time frame. • Daily perspective divergences suggest either a consolidation, or a pullback in an ongoing uptrend. • Weekly perspective divergences suggest a more sustained consolidation or even a reversal of trend, particularly if important support is violated. • Monthly divergences have the potential to result in a more sustained decline or even to reverse an uptrend. MACD sell signals give validity to divergences. • Monthly signals have much more weight than weekly and daily. • Monthly divergences don’t always occur prior to monthly MACD sell signals • But when a sell signal does occur it offers a structural warning. Graystone Bitcoin Trust (GBTC) Weekly: • The March 2021 high (A) was followed by a roughly equal price high (B). However, the MACD momentum peaked at a significantly lower high (Line A1-B1), forming a classic divergence that suggested that upward momentum was fading. • At point C, the weekly MACD moved onto a sell signal (the fast moving average crossed below the slower moving average) strongly suggesting that positions should be either lightened or sold. • After the sell signal was generated, price declined from 50 to 24. • A weekly MACD buy signal was then generated at point D. The subsequent rally carried price near the prior high. • The failure of the MACD to match its prior high warned of potential weakness. • The MACD generated another sell signal at point E, suggesting lightening or selling positions. Price offered another decline from 50 to 24. • After a multi-week consolidation in March-April 2022, price broke below the support @24 (S1-S2). • MACD continues to decline, suggesting that the price decline may not be over, notwithstanding interim rallies. • Before considering a new long, evidence of stabilization at a low and the gradual reversal of the daily, weekly and eventually, monthly MACDs would be required. Grayscale Bitcoin Trust (GBTC) Daily • On the daily perspective chart that there is a divergence from price (A-B) and the MACD (C-D) • The divergence warned of the possibility of bearish developments spreading to the weekly and monthly. Graystone Bitcoin Trust (GBTC) Monthly: • The monthly chart also shows a divergence at points MD1 and MD2 and on the histogram at MD3 and MD4. • At the second price high (B), MACD hadn’t yet generated a sell signal, but it was beginning to flatten and roll over. • One can also see the falling histogram, as the MACD narrows (blue arrow), and the divergence progressed, until it finally generated a clear sell. • Price lingered above the support at 24 (S2) for several months providing ample time to adjust positions before the May 2022 price breakdown. Momentum is still declining, suggesting that it’s too soon to consider re-entry, notwithstanding interim rallies, which can carry into resistance, formerly support. Graystone Bitcoin Trust (GBTC) relative to SPX Weekly: • One can also note a similar warning in the weekly Relative Strength (RS) negative divergence. • In this case the RS for BITCOIN/SPX was also suggesting a change from a period of relative overperformance to one of relative underperformance. Is Gold Next? Gold is displaying many of the same long term MACD warning behaviors evident in the GBTC chart. COMEX Gold Daily: • Despite the May 2020 (R1) and 2022 (R2) price peaks being roughly equal, the MACD (R3 & R4) peaked at a much lower level. • A MACD Sell signal occurred after the 2020 peak (R3), alerting to the possible price decline, which eventually carried to the March 2021 low near 1,700 (S1). • The lower March 2022 MACD peak (R4) also registered a sell signal, suggesting one might lighten positions. COMEX Gold Monthly: • There is a monthly multi-year MACD negative divergence between the 2012 (R1) and 2022 (R2) price peaks. • In 2012, the monthly MACD structural sell signal (R3) was very effective as price collapsed toward 1,100 on the sell signal. • In March 2022, the MACD, registered another major monthly sell (R4), and then subsequently rallied to test the high (R2) without generating a new buy signal (A), a sign of weakness. • The MACD has remained negative and appears poised to perhaps continue down. • This suggests that Gold may be in danger of a potentially large decline, especially if support at 1,700 is broken. • Such a breach could easily find support at the breakout level from the 2013 to 2019 basing pattern at 1400. • It is possible, however, that although GOLD has broken out in many other currencies, the extraordinary current strength in the US dollar may be contributing to the Gold disappointment. Louise Yamada CMT LYAdvisors LLC
GEducation
by CMT_Association
75
Bitcoin short-term view - bullish divergence for recoveryBitcoin short-term view - bullish divergence for recovery After the second leg down as I predicted we see a bullish divergence on this 1h chart Picture will get more bullish when BTC breaks $30.630. For further downside moves $28.728 is next price action support. Any comments on that? Drop me a nice comment if you'd like me to analyze any other cryptocurrency. *not financial advice do your own research before investing
COINBASE:BTCUSDLong
by Crypto4Everybody
1
MSFT MSFT is still bearish so any bullish trades need to be quick with trailing stops to capture gains. MSFT presented a bullish divergence that suggests a reversal. I jumped in after the bullish divergence and as soon as the MACD crossed over to green. The additional confirmation of the trade is now that the MACD is going bullish above 0 and the RSI is crossing the 50 mark. Bearish vol on the 4hr is still weak - but watching for a signal to exit and save gains. My plan for now is to see how 50MA affects the pricing and if RSI can reach overbought to signal an exit.
NASDAQ:MSFTLong
by Authar100
AMZN bullish divergence with RSI confirmationAMZN on 4H formed a clear bullish divergence with lower lows being formed in price action and higher highs in the MACD. This can also be considered a double bottom. (possible reversal) I was late to jump but entered at 2182.70 and holding especially as RSI crosses the 50 mark and suggests a bullish trend. AMZN has been bearish and for awhile, so will be careful to look out for weakening of this small trend. Planning to hold till either MACD crosses over and/or RSI becomes overbought.
NASDAQ:AMZNLong
by Authar100
AXS is gonna Reach 3$ (or is it?)AXS is in a Rounded Top. The Price is in Big Trouble,because The Price Is in a BIG bearish Pattern (Weekly Time Frame) .The Price can Decrease as Much as The Length Between the Top and the Bottom of the rounded top and fall to 3$. BUT there is a Regular Bullish Divergence on MACD which will Make Us doubt This Movement. There is a Slight Chance that the Price would Obey this Divergence Instead of the Pattern which We Talked about. So we Can also Rely on a Bullish Scenario as well. But The Break out MUST Happen which is gonna Take a week or two for Us to come to a Conclusion about This. -AXS is in a Rounded top -The Price can Fall to 3$ -Weekly Timeframe -(+RD) On MACD -The Price Might Become Bullish. -wait a week or two For a Conclusion. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Thank you for seeing idea . Have a nice day and Good luck
by CobraVanguard
6
EURUSD Bearish Open, Bullish CloseI think we'll see a bearish start to the day. But that initial breakout will only complete the retracement we saw last Friday. The real money's to the up side. Stochastic is showing bearish divergence going into the London open. Long traders be cautious! it might be safer to wait for a break of structure down towards demand. See my weekly projection below for more on that. I'm currently in short looking to trade the breakout. I'll keep you updated.
Short
by NeoDaNomad
Ethereum Daily Bulish DivergenceHey everyone, you wanted to see ETH/USD view ? Nothing Special ? Huh ... Well here is one :) Been a while since I opened leveraged short position on ETH based on Weekly chart seen below We allready scoped ETH on Weekly month ago but this time I see exact oposit of previous Weekly bearish divergence actually on Daily timeframe which is bullish Divergence Divergences are good way for smart investing on Daily/Weekly charts It takes a long time but the odds are on the proper R:R side *** I sold the 4K range to load in sub 3K. I´ve added major positions at 2200 range and I feel like its time to add more now We at 2K that is a 50% Discount and I´m going back all in Chachain KEYWORDS ETH, Ethereum , Ether, R:R, money management, risk, reward, technique, style, trading, bitcoin , bitcointrading, profitable trading, profittrading, profit trading, secret, divergence, bull divergence, bear divergence, divergencetrading, divergence trading, trading strategy, how to trade bitcoin , bitcoin trades, bitcoin trading, make profit, take profit, trading strategy, trading technique, successful, successful trader, successful technique, successful strategy, successful secret, how to trade, trend analysis, technical analysis , indicators, rsi , relative strenght index, let it rain, successful life, easy strategy, easy trading, easy technique, make money, crypto investing, investing, crypto, cryptocurrency, cryptocurrencies, mentoring, money, chartart, beyond technical analysis
COINBASE:ETHUSDLong
by Anoinvest
1
BTC can Get Above 60k in MIdtermIf we Look at Bitcoin In Bigger Timeframes Like Weekly, We can See that the Price is in a BIG Broadening Wedge Pattern.This is a Good Pattern and Since the Price Haven't Managed to Break the Pattern, It means It is Still able to Range in This Pattern. The Price has touched The Bottom of this pattern Last week and now Is Near it. The Bullish Chance Is Pretty High Since We can also See a Regular Bullish Divergence On MACD as well (+RD) Which is another Reason For BTC to Become Bullish Pretty Easily. The Price in Midterm Should get Back above 60K. -BTC is in a Big Broadening Wedge(Weekly Time Frame) -The Broadening Wedge is still Reliable (No Break out yet) -Price is near the Bottom -(+RD) On MACD -It can Get above 60K in Midterm _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Thank you for seeing idea . Have a nice day and Good luck
COINBASE:BTCUSDLong
by CobraVanguard
21
ZCASH Can Become Bullish Even In This Bearish PatternIf We Observe ZCASH in Bigger Timeframes like Weekly, We can See That the Price Is in a Big Descending Triangle! So you Might Think to yourself that the Price is gonna Decrease,But there is a Bullish Sign as well! There is a Regular Bullish Divergence (+RD) On MACD which will Determine our Calculations. The Chance of being Bullish Is High So we can Safely Say that the price will Increase Soon & WILL break the Triangle. The Next Possible Resistance is around 280$. -ZCASH is in a Big Descending Triangle (Weekly Timeframe) -(+RD) On MACD will Change the Situation -Price will become Bullish -Resistance at 280$.
Long
by CobraVanguard
8