Momentum

Momentum is the rate at which price is changing — how strongly and how fast a market is moving in its current direction. In technical analysis it is treated as a measurable property: strong momentum means large, consistent price changes in one direction, while fading momentum means the moves are shrinking even if the direction has not yet changed. Indicators such as RSI, MACD, and the rate-of-change oscillator all attempt to quantify it, and a whole style of trading — momentum trading — is built on the observation that assets moving strongly in one direction often continue for a while.

For example, if Bitcoin posts a series of large green daily candles on rising volume while pullbacks stay shallow, momentum is strong, and momentum traders would look to join the move rather than bet against it. If later highs come on smaller candles and weakening RSI, momentum is fading even though price is still rising — often an early warning of a trend change.

A common misconception is that momentum and trend are the same thing; a market can be in an uptrend while momentum deteriorates, which is exactly what divergence signals capture. Momentum describes the engine's power, while trend describes the direction of travel, and the engine usually sputters before the car turns around.