XVGBTC Verge signals weakness and may return into down trend
Hi all,
Previously, I posted a bullish analysis on XVG where a regular bullish divergence could be seen on the 4hr and 1hr chart. Along with the descending wedge, I assumed a reversal would be possible, and reaching newer highs.
I went long on the breakout, but soon realized that oscillators did not validate the price action. Although a bullish divergence was seen earlier, another divergence could be seen simultaneously. I am referring here to the hidden bearish divergence that is indicated with blue lines (lower highs on the price, higher highs on the oscillator). This divergence suggests that prices may resume to their original trend, which was a down trend for this situation. Seeing these two divergences in the same time frame make the reversal more doubtful I would say, however I haven't really backtested this yet. Should you know more about this, please do not hesitate to leave your comment if you can confirm this or reject.
For me, divergences have put me into the right direction for the serious technical trades I've done so far. I am happy that I learned about this early on, as knowing this tool can save you a ton. For the reliability of these divergences, I can't really say they work all the time, but they are a comforting tool for confirming the price action. I will have to do many more trades to make this a more valid statement, but for now, I will put my trust into them.
In conclusion, I think that further retracement and ultimately reaching the horizontal support around 325 is possible. For now, I have closed my long position and will wait what the market will do. There is still a tremendous opportunity for XVG to go up.
I hope this was informative, and please let me know your thoughts!
Maurits
Previously, I posted a bullish analysis on XVG where a regular bullish divergence could be seen on the 4hr and 1hr chart. Along with the descending wedge, I assumed a reversal would be possible, and reaching newer highs.
I went long on the breakout, but soon realized that oscillators did not validate the price action. Although a bullish divergence was seen earlier, another divergence could be seen simultaneously. I am referring here to the hidden bearish divergence that is indicated with blue lines (lower highs on the price, higher highs on the oscillator). This divergence suggests that prices may resume to their original trend, which was a down trend for this situation. Seeing these two divergences in the same time frame make the reversal more doubtful I would say, however I haven't really backtested this yet. Should you know more about this, please do not hesitate to leave your comment if you can confirm this or reject.
For me, divergences have put me into the right direction for the serious technical trades I've done so far. I am happy that I learned about this early on, as knowing this tool can save you a ton. For the reliability of these divergences, I can't really say they work all the time, but they are a comforting tool for confirming the price action. I will have to do many more trades to make this a more valid statement, but for now, I will put my trust into them.
In conclusion, I think that further retracement and ultimately reaching the horizontal support around 325 is possible. For now, I have closed my long position and will wait what the market will do. There is still a tremendous opportunity for XVG to go up.
I hope this was informative, and please let me know your thoughts!
Maurits
Trade active:
Hope you didn’t fall for the bull trap that happened yesterday