Crypto glossary
RSI (Relative Strength Index)
The RSI (Relative Strength Index) is a momentum indicator that scores recent price moves from 0 to 100 to flag overbought or oversold conditions.
The Relative Strength Index, introduced by J. Welles Wilder in 1978, compares the size of recent gains with recent losses, usually over 14 periods. The result is an oscillator between 0 and 100. Readings above 70 are traditionally seen as overbought and below 30 as oversold, with 50 as the neutral midpoint.
Crypto analysts quote the RSI on daily, weekly and monthly charts, often noting when bitcoin's weekly RSI reaches levels seen at past tops or bottoms. Divergences are another common signal: if the price makes a new high while the RSI makes a lower high, momentum may be fading. The indicator is built into almost every charting tool and exchange interface.
In strong trends the RSI can stay overbought or oversold for weeks, so selling just because it crosses 70 can mean missing much of a rally. Settings and timeframes change the readings, and the indicator works best alongside price structure and volume.
Example
After ten straight days of gains, ETH's daily RSI climbs to 78; some traders read that as overbought and tighten their stops, even though the price may keep rising for a while.
