Relative Strength Index (RSI)
A momentum oscillator scaled 0 to 100 that gauges whether an asset has run too hot or too cold.
Welles Wilder introduced RSI in 1978. It compares the size of recent gains to recent losses over a set period, usually 14 candles, then plots the result on a fixed scale. Readings above 70 flag overbought conditions; below 30, oversold.
Those thresholds are signals, not commands. Bitcoin has held an RSI above 70 for weeks during strong rallies while price kept climbing. Many traders watch for divergence instead: price making a new high while RSI makes a lower one often warns that momentum is fading.
Related terms
Built from two moving averages, this indicator tracks the shifting gap between short- and long-term momentum.
Bollinger BandsThree lines that wrap price action, widening when volatility rises and pinching tight when markets go quiet.
Moving Average (MA)A line that averages price over a set period, smoothing noise to reveal the underlying trend.
VolatilityA measure of how sharply and how often a price swings, in either direction, over time.