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Divergence and Convergence: How to Read Market SignalsThe cryptocurrency market, like any financial market, is full of paradoxes. Price can rise, yet the strength of the trend is already weakening. Indicators may show that the move is “running on fumes,” but most traders keep buying at the top or selling at the bottom. The result is always the same: emotional trading and chaos instead of system and consistency.
The main problem is that most participants only look at price. But price is just the tip of the iceberg. Beneath it lie volumes, momentum, trader sentiment, and recurring statistical patterns. This is where divergence and convergence come into play — signals that often warn of a trend change long before it becomes obvious.
What are Divergence and Convergence
Divergence occurs when the price makes new highs or lows, but a momentum indicator (such as RSI or MACD) shows the opposite — weakening strength. It’s a signal that the trend is losing energy and the probability of reversal is rising.
Convergence is the opposite. The price updates a low, but the indicator shows higher readings. This suggests sellers are losing steam and buyers may soon regain control.
On the chart, these may look like small details, but for an attentive trader, they mark turning points — the very beginnings of shifts that later become obvious to everyone else.
Why These Signals Matter
Imagine Bitcoin climbing from $105,000 to $118,000. Everyone is euphoric, and newcomers rush to open longs, hoping for more upside. Meanwhile, RSI is already showing divergence: price is up, momentum is down. For a careful trader, that’s a red flag.
Moments like this help avoid buying at the peak and prepare for an incoming correction. More importantly, divergences not only give exit signals but also highlight potential reversal zones — places where traders can plan new entries in the opposite direction.
How to Read Divergence and Convergence
Compare price highs/lows with the indicator. If price rises but the indicator falls — it’s divergence.
Check the context. A single signal on the indicator means little. Support/resistance levels, volumes, and candlestick structure matter.
Be patient. Divergence can form over several candles, and the market often makes one last push before turning.
Combine tools. Use divergence alongside TP/SL zones and trendlines to improve accuracy.
Common Mistakes
Many beginners make the same error: they see divergence and instantly trade against the trend. That’s wrong. Divergence isn’t a “buy/sell button,” it’s a warning. It says: “Be cautious, momentum is fading.” The actual reversal must still be confirmed by price structure and volumes.
Another mistake is ignoring timeframe. Divergence on a 5-minute chart may only play out for a few dollars, but on a 4H or daily chart, the move could be massive.
Building it Into a System
This is the crucial part. An indicator alone won’t make a trader successful. Divergence and convergence need to be part of a system where:
- entry and exit zones are pre-defined,
- profit targets are clearly marked,
- risk is limited by stop-losses,
- and decisions are made without emotions, based on structure.
This is where algorithms and automation prove invaluable. An automated model spots divergence earlier than the eye, flags conditions for a probable trend shift, and guides the trade step by step.
Why It Works
Markets move in cycles, and history repeats. Divergence and convergence are not magic, but a reflection of market physics: momentum fades, energy runs out, and no trend lasts forever. Ignoring these signals means trading blind.
Integrating them into a structured process means having a map of potential scenarios ahead of time. It doesn’t guarantee perfection, but it eliminates guesswork and replaces it with probabilities and discipline.
Conclusion
Divergence and convergence are market warnings for those who pay attention. They help traders exit on time, avoid entering at peaks, and prepare for reversals. Most importantly, they train discipline and patience — the qualities that separate long-term survivors from those who get washed out.
In a world where emotions break strategies, systematic analysis provides the edge. Automation, technical tools, and the ability to read market structure turn chaos into a structured process. For traders seeking to look deeper than just price, divergence and convergence are signals worth learning to read as carefully as a book.
Ethereum: when levels guide the tradeEvery trader knows: entering the market is one thing, but understanding where to take profit is another. Without a system, the chart turns into chaotic candles, and decisions are driven by emotions.
A recent move on Ethereum’s 4-hour timeframe clearly showed the value of structured visualization. The entry was around $4274, with price developing up to $4650, where many participants could have locked in profit before the trend shifted.
This isn’t randomness. It’s the power of levels that outline the market’s roadmap in advance: where strength is concentrated, where reversals may happen, and where profit-taking makes sense.
For beginners, such levels serve as a navigator: they reveal patterns that would otherwise take years to master.
For intermediate traders, it’s an accelerator: a tool that eliminates chaos, enforces discipline, and reduces mistakes caused by emotions.
For advanced traders, it’s about saving time and keeping strategy under control without redrawing charts manually.
For investors, it provides a visual layer of clarity: entry and exit points become easier to track, and long-term strategies gain transparency.
The market will always move on its own terms. But traders have a choice — react to chaos or build structure. Visualization of levels provides the system: it shows the market map and helps maintain discipline regardless of volatility.
Chainlink Rejected at $26 but Support at $21.15 Holds Chainlink (LINK) has faced rejection from the $26 high time frame resistance after forming a bearish engulfing candle. Price now eyes the $21.15 support level, which is reinforced by strong technical confluence.
LINK’s recent rejection at $26 has temporarily slowed bullish momentum, with price retracing from its high time frame resistance. However, a key support zone is emerging at $21.15, a level backed by multiple technical indicators. If buyers defend this level during a retest, LINK’s bullish structure will remain intact, and a rotation toward higher objectives becomes highly probable.
Key Technical Points:
- Rejection at $26: Price was capped by high time frame resistance, leading to a bearish engulfing candle.
- Critical Support at $21.15: Confluent with the 50-day moving average and 0.618 Fibonacci retracement.
- Next Target $28.34: A confirmed bullish retest could open the path to this high time frame resistance.
LINK’s reaction at $26 highlights the importance of this resistance zone. The bearish engulfing pattern that formed here suggests profit-taking and the presence of sellers, leading to a retest of the value area high. Despite this rejection, the retracement appears orderly, with price action respecting key structural elements that still support a bullish outlook.
The $21.15 level now stands as the critical line in the sand. This zone is not only a horizontal support but also aligns with the 50-day moving average and the 0.618 Fibonacci retracement. Such a confluence often serves as a strong foundation for reversals or trend continuation. If LINK revisits this level and demand emerges, it would confirm the presence of buyers and validate the ongoing bullish structure.
Market structure remains favorable as long as higher lows are respected. Even after the rejection, LINK has not broken below key structural supports, meaning that the overall trend bias remains intact. A successful retest of $21.15 would reestablish bullish confidence and allow for continuation toward the next resistance target at $28.34. Without a breakdown, the broader market narrative still leans toward continuation higher.
What to Expect in the Coming Price Action:
If LINK holds $21.15 during a retest, bullish continuation becomes the most probable outcome, with $28.34 serving as the next upside target. However, a failure to maintain this support could weaken the structure and open the door to deeper corrective moves before any renewed upside momentum develops.
Fartcoin Defends $0.77 Support, Eyes Rotation Toward $1.36Fartcoin has reverted to the $0.77 region, a level reinforced by both Fibonacci retracement and daily support. Multiple daily closes above this zone suggest demand is present, keeping bullish continuation on the table.
The $0.77 mark has emerged as a pivotal region for Fartcoin’s price action, aligning with a critical Fibonacci level and daily support. Recent trading has confirmed demand in this area, with multiple daily closes holding above it. From a structural standpoint, this confluence is crucial in maintaining bullish momentum and setting up the conditions for another rally.
Key Technical Points:
- Support at $0.77: Confluence of Fibonacci retracement and daily support makes this a key level to defend.
- Bullish Engulfing Candle: Liquidity sweep followed by an impulsive rebound signals demand is active.
- Upside Target $1.36: A rotation toward this high time frame level becomes likely if volume inflows confirm.
Price action around the $0.77 level has been decisive. Following a liquidity breach and impulsive candle lower, buyers quickly stepped in to spark a bullish engulfing candle, reclaiming support. This reaction suggests that demand is sitting at this level, providing the first confirmation that $0.77 is acting as a strong floor for continuation. Multiple daily closes above this support reinforce the bullish case and highlight the presence of accumulation.
Market structure also favors a continuation. The liquidity sweep beneath $0.77 has already cleared resting stops, reducing downside pressure. This event is often a precursor to renewed bullish momentum, as liquidity is absorbed and price stabilizes. The subsequent ability of buyers to keep price above $0.77 shows that the structure of higher lows can remain intact, keeping the broader bullish bias alive.
However, the key missing element is volume. While structural support has held and demand is visible, a sustained rotation toward $1.36 requires strong bullish inflows to validate momentum. Without this confirmation, the current price action risks stagnation, with upside capped until participation increases. Monitoring trading volume in the short term will be critical to gauge whether bulls are prepared to push Fartcoin higher.
What to Expect in the Coming Price Action:
If demand continues to defend $0.77 and bullish volume confirms, Fartcoin could rotate toward the $1.36 level, which represents a significant high time frame resistance. A failure to generate volume, however, could keep price consolidating near current levels, delaying the next move.
ORI Setup: Watching for Pullback into Accumulation ZonesOn the weekly timeframe, ORI has printed a 10-week rally straight into a key supply zone—aligning cleanly with Gann’s 7–10 bar exhaustion principle within a single swing. This move suggests we’re nearing a potential inflection point. There’s still room for a final extension toward the second major supply structure around $25, but any push into that zone would likely be met with selling pressure and a corrective phase.
On the monthly, price has been advancing aggressively—but notably on declining volume, hinting at underlying weakness and possible buyer fatigue. If price stalls or rejects around current levels, it sets the stage for a layered accumulation opportunity at the zones highlighted on the chart.
Should price consolidate and absorb supply in these areas, the setup opens the door for a breakout to all-time highs, offering a compelling Risk-to-Reward profile for strategic positioning.
Setup Invalidation: A decisive break and close below $14.89 would invalidate the thesis, confirming a macro higher low breakdown. However, wicks into this zone are acceptable as part of a liquidity sweep or shakeout.
Richtech Robotics to $8.00!Richtech Robotics has completed a multi-month symmetrical triangle consolidation and has now broken out decisively to the upside on heavy volume. The triangle was defined by resistance near $4.23 and support near $1.13, creating a base height of roughly $3.10 (273%).
Breakout Dynamics:
Breakout Level: ~$2.17
Measured Move Projection: Applying the 273% height to the breakout point gives a technical target near $8.00.
Volume Confirmation: Breakout occurred on extreme volume (~66M shares), confirming strong market participation and adding credibility to the move.
Key Levels:
Support: $2.00 (must hold to validate breakout).
Interim Resistances: $3.50 and $5.20 (profit-taking zones).
Final Target Zone: $8.00 (measured move completion).
Interpretation:
This breakout signals the end of a prolonged consolidation phase and the beginning of a new bullish leg. The measured target of $8.00 implies potential upside of over 200%+ from breakout levels, though the path may include pauses at $3.50 and $5.20. Sustained volume and fundamental catalysts (expansion in Walmart, healthcare, and China ventures) will be critical to sustaining momentum.
Richtech Robotics is entering a technical expansion phase following a multi-month triangle breakout. With strong volume confirmation and a measured target of $8.00, RR presents a high-risk, high-reward setup in the robotics sector.
Risk management is centered on maintaining support above $2.00, with upside potential scaling in stages toward $3.50, $5.20, and ultimately $8.00.
BTC, W. MACD viewBTC, W. MACD analyzes. Red line is tapping the time of the bearish cross, yellow line is the bottom and green line - bullish cross. Looking at the signal lines crosses over the time. If we ignore signals right after the bear market, when RSI was low and look only at the high volume move and large price changes, it happened just several times, when signal lines crossed on that time frame. We already have 1 week after the cross, so it is confirmed, bounce didnt happen. What was happening after the bearish cross is that for the next 2-4 months ( 90, 130, 70 days 225 days in bear market) price was dropping. Lets assume, or its a fact, that market has changed, compared to few years ago and current bull market is stronger, then last two times after bearish cross, price was going down for 10 and 19 weekly bars, until signal line of the reverse turned yellow. Based on this data, we have avg. 15 weeks of bear market.
$SPY - "Broken Wedges Become Channels"There are reasons for it. I could go into it all. I don't have the energy. This isn't advice. You are responsible for your own investments and allocations and whatnot. I'm just sharing what I do. We will most likely see a channel first. I buy channel bottoms. I am not perfect. They only thing I try to perfect is my position allocation. I will be buying when it makes sense to me.
Daily Confluence Zone Holds as Market Eyes $4.70 RotationPrice action has entered a high confluence zone where daily support, the value area low, and the 0.618 Fibonacci retracement align. Despite a bearish engulfing daily test, this region is holding, hinting at potential demand that could trigger a move toward $4.70.
Introduction:
The market is currently consolidating at a critical inflection point. This zone of support has already been tested multiple times, yet sellers have been unable to break it convincingly. Such behavior often signals underlying strength, particularly when paired with Fibonacci retracements and high-volume nodes. Traders are closely monitoring whether this area will serve as a springboard for another rotation upward.
Key Technical Points:
- Daily Support in Confluence: Price is holding at the daily support, aligning with the value area low and the 0.618 Fibonacci retracement.
- Failed Bearish Follow-Through: A bearish engulfing daily candle failed to generate downside momentum, suggesting demand is present.
- Targeting Weekly SR at $4.70: A sustained bounce from this zone could propel price toward the weekly SR, which is in confluence with the point of control.
Main Analysis:
Recent trading sessions have highlighted the significance of this confluence zone. A bearish engulfing candle initially threatened to push the market lower, but the lack of follow-through revealed that buyers were willing to defend the 0.618 Fibonacci level. This response has preserved structural support and kept the market from cascading into lower lows.
Volume behavior is also worth noting. While bearish candles tested this area, they were not accompanied by strong continuation volume, reducing the conviction of the move. The next candle opened within the same region and is currently stabilizing. An influx of bullish volume would confirm demand and reinforce the idea that sellers are being absorbed here.
From a market auction theory perspective, the defense of the value area low suggests that price is attempting to rotate back toward the point of control. The POC is often a magnet for price action, as it represents the area of highest traded volume within the range. In this case, the POC aligns with the $4.70 weekly SR, increasing the likelihood of this level becoming the next destination if demand continues to hold.
The Fibonacci alignment adds another layer of technical confluence. The 0.618 retracement is widely regarded as a key level for reversals and consolidations, especially when paired with visible structural support. Each defense of this level strengthens the case for bullish rotation and discourages sellers from pressing their advantage.
What to Expect in the Coming Price Action:
If bullish volume confirms demand at this support zone, the market is likely to rotate higher toward the $4.70 region. This would align with both the point of control and weekly SR, making it the most probable upside target. However, a clean breakdown of the 0.618 Fibonacci would invalidate this scenario and reopen the path toward lower supports.
BNB Holds Above Range High as Market Eyes $1,000 ExtensionBNB has broken out of its long-term trading range and now faces resistance at the $905 Fibonacci extension. A rejection here, paired with consolidation above the former range high, would be considered bullish for continuation toward $1,000.
After months of ranging, BNB has finally broken free from its long-term consolidation and is testing key Fibonacci extensions. Price action is showing strength on the higher timeframes, with momentum leaning toward further upside as long as support is maintained above the former range high. This breakout comes at a crucial time, where the market as a whole is attempting to establish sustained bullish structures.
Key Technical Points:
- Breakout Confirmed: BNB has broken above its long-term trading range, flipping prior resistance into support.
- Immediate Resistance at $905: Price has stalled at the Fibonacci extension, making this the key short-term hurdle.
- Next Target $1,000: The 0.618 Fibonacci extension of the monthly trend sits at $1,000, representing the next major objective.
Main Analysis:
The breakout above the established trading range has shifted the broader outlook for BNB into a bullish continuation phase. For months, the token traded in a sideways structure, but buyers have now gained the upper hand by forcing a close beyond range highs. This structural shift is significant, as it marks a potential transition from consolidation into an extended bullish trend.
The $905 level is proving to be immediate resistance. This region aligns with the Fibonacci extension of the prior move and is historically a zone where price often pauses. A clean rejection here is not inherently bearish, provided BNB continues to consolidate above the range high. Such price action would indicate acceptance above prior resistance, turning it into support and creating a strong foundation for higher moves.
From a technical perspective, BNB remains in a strong uptrend. Higher highs and higher lows on the monthly timeframe confirm that bullish momentum is intact. The 0.618 Fibonacci extension level at $1,000 is the logical next target once $905 is cleared. Breaking through this extension would signal that the current trend has enough momentum to sustain additional upside.
Volume profile data further supports the bullish bias. Since 2022, overall trading volume has been in decline, yet bursts of bullish volume inflows during key breakout attempts suggest that demand is returning at strategic moments. If this pattern continues, it will likely underpin a larger continuation move that carries BNB beyond the current resistance zone.
What to Expect in the Coming Price Action:
BNB’s ability to hold above the former range high will determine the strength of the current breakout. Sustained consolidation here, followed by a decisive move through $905, would open the door for a push toward the $1,000 Fibonacci extension. Failure to hold above the range high, however, would place the breakout at risk and could trigger a deeper retracement before any new leg higher.
ADA Correction Finds Support at $0.84, Eyes ContinuationCardano (ADA) has corrected back toward the $0.84 region, a zone of strong confluence with the 0.618 Fibonacci retracement and the 50-day moving average. If this support holds, ADA could resume its bullish structure and target the $1.19 level in the coming sessions.
After a series of higher highs and higher lows, ADA has retraced into a critical support zone. The $0.84 level aligns with several technical indicators that often act as strong foundations for continuation within an uptrend. With the broader market leaning bullish and ADA respecting key structural levels, traders are closely watching whether this pullback will serve as a springboard for the next leg higher.
Key Technical Points:
- Support at $0.84: This level is backed by the 0.618 Fibonacci retracement and the 50-day moving average.
- Continuation Target $1.19: Holding this zone opens the path toward $1.19, the next upside objective.
- Bullish Market Structure: ADA continues to print higher highs and higher lows, keeping its uptrend intact.
Main Analysis:
The correction toward $0.84 is part of a natural retracement process within a bullish structure. Rather than weakening the trend, such pullbacks are often healthy, allowing the market to reset before continuation. The 0.618 Fibonacci retracement is a well-recognized technical level for reversals, especially when paired with the 50-day moving average, which is now acting as dynamic support.
Market structure also favors the bulls. ADA has consistently printed higher highs and higher lows, confirming the presence of sustained momentum. The ability of buyers to step in at increasingly higher levels signals confidence in the trend. As long as $0.84 holds as support, the probability of ADA rotating higher remains elevated.
The $1.19 level now stands out as the next logical target. This zone represents a measured extension of the current bullish trend and will likely act as resistance when tested. However, a break through this level would confirm ADA’s strength and open further upside potential.
Volume behavior will be crucial to watch. Declining volume during the pullback suggests that selling pressure may be weakening, while an influx of bullish volume at support would validate the demand zone and confirm market readiness for continuation. Should this occur, ADA’s path toward $1.19 becomes increasingly probable.
What to Expect in the Coming Price Action:
If ADA maintains support at $0.84, backed by the 0.618 Fibonacci and 50-day moving average, a bullish continuation toward $1.19 is likely. A decisive break above that target would reinforce ADA’s uptrend and pave the way for further gains. Conversely, a breakdown below $0.84 would weaken the bullish case and could trigger a deeper retracement before the uptrend resumes.
SONIC Holds $0.18 Support as Market Eyes Potential LiquiditySONIC has reverted back to the $0.18 high time frame support, a level in confluence with the value area low. This zone could serve as the base for a bullish reversal if a swing failure pattern (SFP) forms and demand returns, opening the door to $0.26 and potentially $0.34.
For weeks, SONIC has been consolidating around the $0.18 mark, a level that has acted as a major support zone on higher timeframes. Each test of this area underscores its importance, as buyers repeatedly defend it. However, the market is yet to confirm a decisive reversal, and volume behavior will be critical in determining whether this level sparks a meaningful bounce or eventually gives way to further downside.
Key Technical Points:
- High Time Frame Support at $0.18: Confluent with the value area low, this zone remains a structural pivot.
- Liquidity Grab Potential: A swing failure of the current low could establish a reversal if backed by volume.
- Targets at $0.26 and $0.34: Sustained bullish momentum opens the path to these upside objectives.
The $0.18 level has emerged as a cornerstone of SONIC’s price action. Its alignment with the value area low makes it a key battleground for bulls and bears. Price has reverted here multiple times, reflecting both the resilience of this support and the lack of conviction for a clean breakout higher.
A potential bullish scenario lies in the formation of a swing failure pattern. If SONIC dips slightly below its recent low, triggering stop-loss liquidity before reclaiming the level, this would serve as a liquidity grab—a classic signal of accumulation. For this setup to play out, however, bullish volume must accompany the rebound. Without an influx of demand, even a liquidity grab risks failing to sustain momentum.
The first upside target following a confirmed reversal is $0.26. This zone represents the next logical resistance based on prior price interaction and volume concentration. A break and acceptance above it would establish momentum for an extended move toward $0.34, a region that aligns with previous distribution levels.
On the flip side, if $0.18 fails to hold and sellers drive price lower without a strong reaction, the volume profile becomes critical. A decline in bullish participation at such levels could leave SONIC vulnerable to further downside, potentially stretching the current consolidation into a deeper corrective phase.
What to Expect in the Coming Price Action:
As long as SONIC holds $0.18, the setup for a liquidity grab and bullish reversal remains valid. A swing failure followed by an influx of buying volume could initiate a rotation first toward $0.26 and, if momentum persists, to $0.34. Conversely, failure to reclaim $0.18 decisively would weaken the bullish case and shift focus to monitoring lower supports.
$BTC looks Bearish on Daily Time FrameI believe Alt season is closer than ever since BTC dominance keeps falling and Price of BTC as well.
CRYPTOCAP:BTC fell below the FIB 0.5 Level and continues to drop if i were to long it short termly marked are the entries and take profit areas.
BTC made double top and fell aggressively. About time before money flows into the ALTS and meme coins specially.
The decline in BTC.D will stop.Brief Opinion on Crypto
Altcoins:
In my view, the altcoin season hasn’t started yet, and the price surge we expect from altcoins is still not due. The chart I previously shared for TOTAL3 outlines the roadmap.
Bitcoin:
I believe Bitcoin’s dominance won’t decrease further and will rise again. The recent price correction presents a buying opportunity. In the Bitcoin dominance chart, we see that RSI has reached the oversold zone and then formed a divergence. Therefore, I think dominance will rise from these levels.
Regardless of short-term fluctuations, in the long term, Bitcoin will remain strong and dominant.
Good luck
NEoWave Chart