Classical Negative divergence

Classical Negative Divergence is a bearish reversal signal that occurs when the price forms a higher high, but the RSI (Relative Strength Index) forms a lower high. This indicates that although the price is continuing to make new highs, buying momentum is weakening, suggesting that bulls are losing strength and a potential downside reversal or correction may be approaching. The signal becomes more reliable when it appears near a major resistance level, trendline, or supply zone and is confirmed by a bearish candlestick pattern or a breakdown below a key support level. Traders typically use classical negative divergence as an early warning of a possible trend reversal while waiting for additional confirmation before taking a bearish position.