Regular bullish RSI divergence pairs a lower price low with a higher RSI low. Bearish divergence pairs a higher price high with a lower RSI high. Match the same swings, then look for the price event that would support a change in direction.
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Start with two price swings, not two convenient points
Price reaches a fresh low, but the RSI panel looks less weak. That disagreement is what makes divergence interesting. The next job is to identify exactly which two swings you are comparing.
Fidelity describes RSI as a momentum oscillator on a zero-to-100 scale. When a new price extreme is not matched by the indicator, the change in momentum can be a reversal clue. It does not tell you where the next candle will close.
| Regular divergence | Price swings | RSI swings |
|---|---|---|
| Bullish | Second low is lower. | Second low is higher. |
| Bearish | Second high is higher. | Second high is lower. |
Use one timeframe and keep the RSI settings unchanged. Mark each price swing vertically into the indicator pane. Comparing Monday’s price low with Thursday’s unrelated RSI dip can manufacture a pattern that the chart does not contain.
A bullish example: 100 gives way, momentum improves
Consider a hypothetical hourly chart. The first low is 100 with RSI at 24. Price bounces to 106, then falls to 97 while RSI forms a higher low at 31. These are illustrative readings, chosen to show the relationship.
The price low fell by 3, while the RSI low rose by 7 points. That is regular bullish divergence. Yet price is still below the intervening high at 106. Calling the entire decline reversed would skip the most useful price evidence.
Suppose you choose an hourly close above 106 as the condition for reviewing a reversal. Until that close occurs, your note can remain specific: lower price low, higher RSI low, recovery unconfirmed. If price instead makes another low at 95, reassess the newest swing pair rather than keeping the original arrow on the chart indefinitely.
A bearish example can coexist with a rising market
Reverse the relationship. A fictional chart peaks at 120 with RSI at 74, pulls back to 115, then reaches 124 with RSI at 66. Price has exceeded its earlier high, while momentum has not matched the earlier reading.
The pullback low at 115 gives the observation a price reference. As long as that area holds, the chart may continue making higher highs despite the divergence. A subsequent move to 126 would be new information, not proof that RSI was supposed to prevent an advance.
A reading above 70 is a different observation from bearish divergence. The first describes an indicator level; the second compares swings. Fidelity notes that RSI can stay at an extreme during a strong trend. Look at the larger chart context before turning either observation into a directional decision.
Give the analysis a pair it can actually compare
Keep the price chart, RSI pane, indicator label and time axis in the same screenshot. A crop containing only the latest candles may remove the first swing. An RSI pane compressed into a thin strip may hide the difference between 24 and 31.
Ask a concrete question: which two price swings and RSI readings support this divergence? A useful response should identify the pair and the price condition still outstanding. Check both against the image. Our screenshot checklist helps prepare that view.
When the swings are visible, bring the chart to TradeGPT for a structured second read. Compare the reported levels and competing scenarios with your own notes. The sample analysis shows how the report is organized before you start.
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Sources & further reading
References checked September 8, 2026. Price examples and diagrams in this guide are hypothetical.