I got a tip from another trader on this platform to use RSI divergence to rise the probability of predicting a breakout. I'm new to this indicator, so any feedback is much apreciated.
Let's look at the chart. Bitcoin's price turned around at the 9k level, which allows us to see that it has created yet another triangle (the white one). Normally I would be very patient and wait for the breakout to happen and then trade according to this breakout. But I want to try something new. When RSI Divergence occurs, there will most likely be a price reversal. In this case there is not any sign of RSI divergence, which makes the possibility of staying in the trend more likely. So what is this trend; up or down. I think up since the white triangle could be interpreted as a ascending triangle and we are stil in the thrust of the big falling wedge.
All things considered, I think breaking out at the top of the triangle is more likely than a price reversal. In numbers this means: - Price to 8.5k - Price to 8.9k - Breakout at 9k - Target will follow if above has played out as planned
I'm very excited to see how this one is going to play out.
If you have any questions don' doubt to ask in the comments or PM me and follow me for more of this. :)
Mark
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If would draw support trough closing prices, you get this. That would mean that it bounces of right now and is going straight for resistance. The short term target of 8,5k would be non existing then.