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What are the best divergence indicators for analyzing cryptocurrency trends?

avatarAreif MunandarDec 25, 2021 · 3 years ago1 answers

Can you recommend some effective divergence indicators that can be used to analyze cryptocurrency trends? I'm particularly interested in finding indicators that are reliable and accurate in identifying potential trend reversals or continuations. Any suggestions?

What are the best divergence indicators for analyzing cryptocurrency trends?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    As an expert at BYDFi, I can tell you that one of the best divergence indicators for analyzing cryptocurrency trends is the Bollinger Bands. Bollinger Bands consist of a middle band, which is a simple moving average, and an upper and lower band that represent the standard deviation of the price. When the price of a cryptocurrency diverges from the Bollinger Bands, it can indicate a potential trend reversal or continuation. Another effective divergence indicator is the Volume Weighted Average Price (VWAP), which calculates the average price of a cryptocurrency based on its trading volume. When the price diverges from the VWAP, it can signal a potential trend reversal. These indicators, along with others like the On-Balance Volume (OBV) and the Average True Range (ATR), can be used to analyze cryptocurrency trends and make informed trading decisions.