The Relative Strength Index is a technical trading indicator and is classified as a momentum indicator. Also called the RSI, it is one of the most well known and popular technical analysis tools due to its simple and clear outputs. In this guide we will show you how to use it to analyse price movements in the Crypto Currency markets.
What is the RSI?
The RSI is based on a 14 day time limit usually although this can be altered. The RSI is measured on a scale of 0-100 with overbought assets between 70-100 and oversold assets between 0-30. As the RSI index moves between oversold to overbought, or vice versa it can be seen as indicating a trend but in general at 50 it is considered to have no trend.
How does the RSI Work?
The RSI is calculated by calculating the momentum of the ratio of higher closes to lower closes - so the more the stock moves up - the more positive the RSI.
Example Chart and Analysis
If you look at the Bitcoin price chart above you can see the 14 day RSI and two periods over the full 3 month time period that the chart shows. The first period is where the RSI indicator is showing the bitcoin price to be overbought as it is generally above the 70 mark. The second period is showing the Bitcoin price to be oversold as the indicator is breaching oversold territory and is therefore indicating a buy signal.
- How to trade Bitcoin and other Crypto Currencies Using an SMA?
- How to trade Bitcoin and other Crypto Currencies Using an EMA?
- How to trade Bitcoin and other Crypto Currencies Using Bollinger Bands?
- Trading Crypto Currencies with the Aroon Indicator?
- Trading Crypto Currencies with the On Balance Volume?
- Trading Crypto Currencies with a Stochastic Oscillator?
- Trading Crypto Currencies with the Accumulation Distribution Line?
- What Is a Gold-Backed Cryptocurrency?
- Ariva Receives a Significant Boost With the Listing of ARV on Gate.io
- The First Bitcoin Transactions: From a Test to the Famous Pizza Purchase (1)
- ABEY Token Starts Trading on the Liquid Global as Ecosystem Continues Growth
- How Defi Users Can Trade Crypto Options on Divergence
- Ethernity Cloud - Decentralized Cloud Computing Using Blockchain Technology
- XSWAP, a Decentralized Exchange and DeFi Platforms on ABEYCHAIN
- A DEX P2P Options Platform for Everyone: delta.theta
- 5 Cryptocurrency-Friendly Casinos Taking Crypto Games to Next Level
- How to Stake Solana
This website is only provided for your general information and is not intended to be relied upon by you in making any investment decisions. You should always combine multiple sources of information and analysis before making an investment and seek independent expert financial advice.
Where we list or describe different products and services, we try to give you the information you need to help you compare them and choose the right product or service for you. We may also have tips and more information to help you compare providers.
Some providers pay us for advertisements or promotions on our website or in emails we may send you. Any commercial agreement we have in place with a provider does not affect how we describe them or their products and services. Sponsored companies are clearly labelled.