Glossary
Divergence
When price and an indicator such as RSI move in different directions, for example price making a higher high while RSI makes a lower high.
A divergence appears when a chart and an indicator stop agreeing. In a bearish divergence, price makes a higher high but the indicator makes a lower high. In a bullish divergence, price makes a lower low but the indicator makes a higher low.
Traders read it as a sign that momentum behind the move is fading. It is most often discussed with RSI, but any momentum indicator can be compared with price the same way.
Divergence is a warning, not a timing signal. It can persist through several more swings while the trend continues, and it is easy to see after the fact on a chart that has already turned.
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For education only, not financial advice. Crypto assets and stocks are volatile, and leveraged positions can lose more than the money you put in.