The concept of RSI divergence, simply put, is that the price is still pushing higher, but the momentum is already weakening.

Many people only look at the price, unaware that RSI reflects the true energy. Price is just an appearance; momentum is the essence—when the two are out of sync, it’s a signal that the trend is about to change.

**What exactly is divergence**

The most straightforward definition: the price makes a new high or new low, but RSI does not follow with a new high or new low. This doesn’t mean an immediate reversal, but it indicates that the trend is starting to become "weak," and the real turning point is often brewing at this stage.

**Bearish divergence—be cautious about chasing highs**

The price continues to rise, but the RSI peaks are getting lower and lower. On the surface, the bulls are still charging, but in reality, they are running out of steam. This situation most commonly occurs in the late stages of an uptrend or during repeated oscillations at high levels. At this point, blindly chasing long positions is not advisable; instead, you should be wary of pullback risks and avoid getting caught in a trap.

**Bullish divergence—bottoms are emerging**

The price is still declining, but the RSI lows are gradually rising. Although it looks like the bears are smashing the market, they are actually losing momentum. This often occurs at the end of a downtrend or during repeated oscillations and tug-of-war at low levels. While an immediate rebound isn’t guaranteed, the downward movement is clearly narrowing, and risks are decreasing.

**Don’t treat divergence as an entry signal**

This is crucial—divergence is just a warning of a potential change in trend, not an absolute buy or sell signal. Whether to act depends on your position, candlestick patterns, and overall rhythm. Relying solely on RSI to make trades is too naive. Divergence should be used in conjunction with other technical factors to minimize risk.