According to Wedson, this negative divergence usually acts as a contrarian flag. When retail buyers continue to make purchases while skilled traders withdraw from long exposure, it may indicate distribution or, at the very least, a lack of conviction at the current price levels.
With time, the dynamic often shifts through retail capitulation, forced selling, or whales’ re-entry, making this a critical zone to monitor the stability of the momentum.
How It Can Flip The Market’s DirectionWedson highlighted that this trend carries weight in the market. At this point, the magnitude of this gap implies retail investors are absorbing supply without getting sponsored by institutional players. Historically, this setup has preceded volatile reversals or prolonged consolidation, which lasts until whale positioning aligns with the crowd.
