XTZ/USD is showing bearish divergence in the RSI. After a nice run up to $1.12 you can see that XTZ/USD placed higher highs well the RSI place lower Highs. This divergence is usually a good sign of a potential sell off. I would expect a return to the 50MA at minimum before further upside.
Comment
⋅
Perfect execution. Price hit 50MA and bounced. No indication of the sell off being done, but took some profits.
That's very interesting except if you backtest this strategy you will realise it never hits...
FinCodeToad
⋅
@cviryiotis, In this same chart you can see RSI divergence from 01/15/23 to 02/22/23 followed by a 36% drop 03/10/23. Less than a month later. If you zoom out, all of Tezos's major peaks and drops this pattern holds. Now can you give me an example where it doesn't is the question.
cviryiotis
⋅
Yes, you can take any iteration during an uptrend (which is what we’re in right now) and you will see that it doesn’t.
FinCodeToad
⋅
@cviryiotis, Take a look at the uptrend to $9. Exact same divergence, then it went to $0.60. But you still didn't provide one concrete example where the RSI diverged and the price didn't drop.
cviryiotis
⋅
@FinCodeToad, Hey so i actually spent some time looking at your analysis and it's not bad but it is wrong and i'll tell you why. First of all you misidentified it as "Bearish divergence" while there are actually higher lows printing on your RSI indicator as well as lower highs, meaning there are conflicting signals and thus it is "hidden" bearish divergence rather than bearish divergence which could potentially signal a change in trend. Hidden bearish divergence as I am sure you know is very complex, especially with smaller market cap cryptos such as tezos and would need solid confirmation to even be deemed as a reliable signal. Confirmation which usually would come in the form of Bitcoin showing a weakening in its trend. Now let's look at bitcoin which just printed higher lows on price and lower lows on RSI, meaning hidden BULLISH divergence. Also there's pretty good news of a spot ETF coming and interest rates being cut. I would be extremely surprised if Tezos, or any other midcap altcoin for the same matter went back down from here on out.
cviryiotis
⋅
@FinCodeToad maybe if I have enough time I’ll look for some iterations where it didn’t function today but anyway I can assure you, if you’re new to crypto, this is not how crypto works.
@mikroland how can you agree when the idea worked perfectly? It dropped 9% within two days of posting this.
cviryiotis
⋅
@FinCodeToad, true it did work short term. It was based on fake news surrounding the bitcoin etf though so technically you could've made the same exact prediction about any asset within the crypto sphere and still been correct. Which is why I never place short term trades.