What is the difference between a bullish and bearish divergence?

Both divergences look for “disagreement” between the technical indicator you are using and the price action itself. In the case of a bullish divergence, the signal occurs when the indicator is making HIGHER lows (becoming less bearish) while the price action itself is establishing LOWER lows.

What happens after a bullish divergence pattern?

After a bullish divergence pattern, it is common to see a rapid price increase. What is a bearish divergence? A bearish divergence is the pattern that occurs when the price reaches higher highs, while the technical indicator makes lower highs. Although there is a bullish attitude on the market, the discrepancy means that the momentum is slowing.

What is a bullish divergence in Litecoin?

In the case of a bullish divergence, the signal occurs when the indicator makes higher lows (becoming less bearish) while the price action itself is establishing lower lows. Here, you can see Litecoin on the daily chart from back in December of 2019. The price was making lower lows while the OBV made higher lows.

How do you confirm a hidden bearish divergence?

We confirm a hidden bearish divergence when the price shows lower tops, and the indicator gives higher tops. The regular divergence pattern is used to forecast an upcoming price reversal. When you spot a regular bearish divergence, you expect the price to cancel its bullish move and switch to a downward movement.