Why do traders trust an indicator that doesn’t predict anything, but suggests a lot?
In the world of cryptocurrencies, where prices fly like drones over diesel, at least one tool is needed to indicate when the market is overheated and when it is already cold, like popcorn after a movie. And here comes RSI — Relative Strength Index.
🧪 What is RSI?
RSI is a technical indicator that measures the strength of the current trend. It doesn't say directly: "Buy" or "Sell", but hints like that analyst on Twitter — in numbers from 0 to 100.
RSI > 70 → the asset is considered overbought, a pullback is possible.
RSI < 30 → oversold asset, possible upward rebound.
RSI ≈ 50 → calm zone. Like after eating shawarma and surviving.
📏 How does it work?
RSI is calculated based on average gains and losses over a certain period (usually 14 candles).
We won't dive into the formula — not everyone loves math after 9 PM. But it's important to know that:
📍 RSI(14) — this is the classic option (slow, stable).
⚡ RSI(6) — this is already "turbo mode", reacts quickly, but sometimes jumps like an altcoin on news.
🎯 How to use RSI?
RSI rises above 70 - Profit taking, considering selling.
RSI falls below 30 - Entry opportunity (buy), if justified
RSI turns down from 70+ - Sign of trend change. RSI rises from the 30 zone. Potential start of a bullish movement.
📌 Tip: never trade only based on RSI. Use it with volumes, trend lines, and news.
🧠 RSI in crypto is like a seatbelt:
You don't know when an accident will happen, but it’s better to have it.
🚀 Short summary:
RSI is a great tool for finding market peaks and bottoms.
Works best on volatile altcoins, especially on 4h or 1d timeframes.
Combine RSI with technical analysis — and your strategy will be like a well-optimized DeFi portfolio.
A trader is not someone who guessed the price movement, but someone who knows when enough is enough. RSI is all about that.
