Bearish divergence is a technical analysis signal indicating potential downward price movement. It happens when an asset’s price reaches a higher high, but a momentum indicator shows a lower high. This pattern suggests that the upward price momentum is weakening. It signals a possible reversal of the current price ascent.
Context
In cryptocurrency markets, analysts frequently identify bearish divergences as warnings of impending price corrections or market downturns. News articles often reference these technical patterns when discussing shifts in market sentiment or potential selling pressure. Traders utilize this signal to assess risk and adjust their positions in anticipation of price depreciation.
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