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RSI bearish divergence: the signal that we all ignore until it's too late
We have been hearing for years that the bearish divergence of the RSI predicts corrections… and then the price keeps rising as if nothing happened. But this is what really happens:
When the price marks higher highs but the RSI does not confirm lower lows, it means that fewer people are buying even though the price is rising. It's like climbing stairs tired: each step is slower than the previous one.
What do traders do?
The problem: Sometimes this divergence lasts for weeks without anything happening. Bitcoin has had bearish divergences in RSI that lasted for months before the correction. It's not a silver bullet.
The important thing: Combine RSI with support/resistance, volume, and other indicators. Divergence alone won't make you rich, but ignoring it when it comes with rejection at a key level… that really hurts.
Risk management always. The future is volatile.