Relative Strength Index (RSI)

The Relative Strength Index is a momentum oscillator used in technical analysis to measure the speed and change of price movements. It oscillates between zero and one hundred, typically calculated over a fourteen-period timeframe.

Traders use RSI to identify overbought or oversold conditions in a market. When the RSI value exceeds seventy, the asset is generally considered overbought, suggesting a potential price correction or reversal.

Conversely, an RSI value below thirty indicates the asset may be oversold, suggesting a potential buying opportunity. In cryptocurrency markets, RSI helps traders gauge whether a rapid price surge or crash has become extreme relative to recent performance.

It is a critical tool for identifying divergence, where the asset price moves in the opposite direction of the indicator, often signaling a shift in market momentum. By quantifying momentum, RSI provides a structured way to assess the strength of a trend.

It remains a foundational metric for both retail traders and algorithmic systems executing automated strategies.