Crypto RSI: What is RSI in Crypto?
The Relative Strength Index is a momentum indicator that measures the strength of an asset's recent price movements. Traders use it to spot when momentum is strong, weakening, or when an asset may be stretched after a sustained move.
You might also have heard the usual RSI rules: above 70 means an asset is overbought, below 30 means it's oversold, and somewhere around 50 is neutral. That's the basic idea, but RSI is more than those two numbers, so we cover everything you need to know about crypto RSI in our guide.
What is RSI in crypto?
The Relative Strength Index (RSI) is a crypto technical analysis indicator that measures the momentum of an asset's price movements over a set period.
It runs on a scale from 0 to 100. The standard RSI uses 14 periods, although traders can change this depending on their strategy and timeframe. On a daily chart, for example, RSI(14) looks at recent daily price movements. On an hourly chart, it measures recent hourly movements instead.
RSI doesn't measure whether Bitcoin, Ethereum, or another cryptocurrency is fundamentally valuable. It looks at what the price has been doing recently and compares the size of its gains with its losses.
The result is a number between 0 and 100:
RSI above 70: traditionally considered overbought
RSI between 30 and 70: generally considered the normal range
RSI below 30: traditionally considered oversold
An RSI above 70 means recent upward price momentum has been particularly strong compared with recent downward movement. An RSI below 30 means the opposite: selling pressure has dominated recent price action.
But overbought doesn't mean definitely about to crash, and oversold doesn't mean definitely about to pump. RSI is just a means to measure how hard the market has been moving in one direction, rather than a direct prediction of what happens next.
Who created the Relative Strength Index?
The Relative Strength Index was developed by J. Welles Wilder Jr., an American mechanical engineer and technical analyst.
Wilder introduced RSI in his 1978 book New Concepts in Technical Trading Systems. The same book also introduced several other indicators that are still widely used, including the Average True Range (ATR) and Average Directional Index (ADX).
Wilder originally developed RSI for traditional financial markets, but the indicator has since become common across stocks, commodities, forex, and crypto.
How is RSI calculated?
You don't need to calculate RSI by hand. Pretty much every major charting platform can do it for you.
But understanding the calculation helps explain what the number actually means.
The basic RSI formula is:
RSI = 100 - [100 / (1 + RS)]
Where:
RS = Average Gain / Average Loss
The standard RSI uses 14 periods.
The first calculation looks at the gains and losses across those 14 periods and calculates an average for each. After that, RSI uses Wilder's smoothing method, which means the previous average gain and average loss are carried into the next calculation rather than starting from scratch every time.
So if an asset has experienced much larger average gains than losses recently, its RS increases and the RSI moves higher.
If average losses are much larger than gains, the RSI falls.
The formula then converts that relationship into the 0–100 scale.
For example, suppose a crypto has had much more positive price movement than negative price movement over the last 14 periods. Its average gain might be significantly higher than its average loss, pushing its RSI towards 70, 80, or even higher.
If selling has dominated instead, the RSI can fall towards 30, 20, or lower.
You can also change the RSI period. A shorter setting such as RSI(7) will generally react faster to price movements, while a longer setting such as RSI(21) will produce a smoother reading and react more slowly.
What does RSI measure?
RSI measures momentum, so it can indicate things that the price of an asset alone doesn’t.
For example, Bitcoin could still be rising while its RSI is falling. This can indicate that upward momentum is weakening even though the price hasn't started falling yet.
The opposite can happen too. Bitcoin could still be falling while its RSI starts rising, suggesting that selling momentum is losing some of its strength.
These situations are known as divergences, and they're one of the reasons traders use RSI alongside price action rather than simply looking for readings above 70 or below 30.
Does RSI work for crypto?
Yes, RSI charts are widely available across different crypto platforms, but ‘works’ doesn’t mean RSI can reliably predict the next price movement.
Crypto is particularly volatile, which can make RSI readings more extreme and produce more false signals, especially on short timeframes.
RSI tends to be more useful when you consider the wider market context. This is why traders will often look at RSI alongside other information, such as support and resistance levels, moving averages, trend direction, trading volume, and price action.
Does RSI work for other markets?
Yes. The RSI isn't specific to crypto. Wilder originally developed it for traditional financial markets, and RSI is still commonly used to analyse stocks, indices, commodities, and other assets.
How to check RSI of crypto
You don't need to calculate RSI yourself. There are plenty of crypto charting platforms that display it automatically.
Bitbo has a dedicated Bitcoin RSI chart showing Bitcoin's daily RSI, while CoinMarketCap has a crypto RSI dashboard that lets you look at RSI readings across multiple cryptocurrencies and timeframes, including 15-minute, hourly, four-hour, daily, and weekly RSI.
How to read crypto RSI
The easiest way to start reading RSI is to look at where the indicator sits on its 0–100 scale.
Above 70: traditionally overbought.
This means recent upward momentum has been unusually strong. It can be a warning that the price has moved quickly and could be due for a pullback. But it doesn't mean a reversal is guaranteed.
Between 50 and 70: generally indicates positive momentum.
The closer RSI gets to 70, the stronger recent upward momentum has been.
Around 50: relatively balanced momentum.
An RSI around 50 means recent gains and losses are more evenly matched.
Between 30 and 50: generally indicates weaker momentum.
The closer RSI gets to 30, the stronger recent downward momentum has been.
Below 30: traditionally oversold.
This means recent selling has been particularly strong and the asset may have become stretched to the downside. Again, it doesn't guarantee a bounce.
The direction of the RSI matters too. An RSI climbing from 35 to 55 is telling you something different from an RSI falling from 65 to 45, even though both readings are below 70.
It's also worth watching how RSI behaves relative to the price.
RSI divergence
One of the more interesting ways to use RSI is looking for divergence. A bullish divergence happens when the price makes a lower low while RSI makes a higher low.
For example, imagine Bitcoin falls from $90,000 to $85,000, then falls again to $82,000. If RSI makes a higher low during the second decline, it could suggest that the selling momentum behind the move is weakening.
A bearish divergence is the opposite. The price makes a higher high while RSI makes a lower high.
For example, Bitcoin might climb from $90,000 to $95,000 and then make a new high at $98,000. If RSI is lower at the second high, it could suggest that bullish momentum isn't as strong as it was during the first move.
Neither type of divergence guarantees a reversal. It is better thought of as a warning that the momentum behind the current move may be changing.
How to find low RSI crypto
If you're looking for low RSI crypto, you're essentially looking for cryptocurrencies where recent selling has pushed the RSI towards the lower end of its range.
The obvious place to start is below 30, which is the traditional oversold threshold.
For example, imagine an altcoin has dropped 35% over several days after a wave of selling. Its RSI falls to 24.
A trader scanning the market for potentially oversold cryptocurrencies might flag that asset for further research, because a very low RSI can indicate that selling pressure has become unusually strong. If the selling starts to fade, the crypto could potentially experience a short-term rebound.
You can also look for signs that momentum is beginning to recover. For example, an RSI that falls below 30 and then starts climbing back towards 30 could indicate that selling momentum is beginning to ease.
How to find high RSI crypto
Finding high RSI crypto works the same way, but in reverse. You're looking for cryptocurrencies where strong recent gains have pushed RSI towards or above 70.
For example, imagine a smaller altcoin jumps 60% in a few days following a major announcement. Its RSI climbs to 82.
That doesn't automatically mean the token is going to crash. Instead, the high RSI tells you that the recent upward move has been unusually strong.
A trader might use this information to investigate whether the move is supported by something substantial, whether the price is approaching a major resistance level, or whether momentum is starting to weaken.
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