Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a momentum oscillator used in technical analysis to measure the speed and change of price movements. It helps identify overbought or oversold conditions in a security (such as cryptocurrencies).

Key Characteristics

• Works best in ranging (sideways) markets.
• Can remain overbought or oversold for extended periods in strong trending markets.
• Best when combined with other indicators (e.g., MACD, support/resistance levels).

Period Adjustments

The standard period is 14, but it can be adjusted: • Shorter periods (e.g., 9) → more sensitive, more signals (but more false ones). • Longer periods (e.g., 21) → smoother, fewer but potentially more reliable signals.

Practical Usage

Use RSI to: • Confirm trends • Spot divergences (price vs. RSI) • Signal potential reversals Always combine with other tools — never rely on RSI in isolation.