As a personal fan of divergences, this has almost always played out in the stock market. This has even happened with DEFI, in a much shorter time frame, leading to its 50%+ crash. Fundamental investors vs. technical traders were finding ground with each other with YFII, for example, only to lead to a big crash by the end.
divergences appear when an indicator sets a new high, but the price fails to do so in correlation. Simply put, the price prints a higher high, while the oscillator ( ) creates a lower high. Extending that divergence line even further, and switching to weekly timeframes, potentially reveals the dominant downtrend line that is still keeping Bitcoin at bay. Just like Bitcoin already broke free from a downtrend line before exploding toward $14,000, a new, dominant downtrend line was formed after the second peak. Adjusting is critical when re-analyzing the market.
are considered valid when they have at least three touches or data points as always suggested from my previous analysis. Furthermore, the overall symmetry of Bitcoin's weekly structure is now resembling an ABCDE corrective , which in return, may cause Bitcoin to return to lower levels. We aren't sure of how far this will go down, but with also a gap that has not been filled near 9K levels, this could be a big life changing opportunity trade for many.