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📈 Price Making Higher Highs, RSI Trending Lower: A Divergence to Watch!

When the price of an asset is making higher highs but the RSI (Relative Strength Index) is trending lower, it signals a potential bearish divergence.

This pattern often suggests that while the price is rising, the momentum behind the move is weakening.

Traders see this as an early warning sign that the uptrend might be losing steam.

🔍 Trend Break as Confirmation: To validate this divergence, a trend break can be crucial. When the price breaks below a key support level or trendline, it confirms the shift in market sentiment, increasing the likelihood of a reversal.

🏆 Risk-Reward Ratio: By setting up a trade with a 2:1 risk-reward ratio, you ensure that your potential reward is double the risk you’re taking. This strategy helps in maximizing gains while managing risk effectively.

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