How RSI and MACD Work in BTC Analysis:
🔹 RSI (Relative Strength Index)
What it measures: the strength and speed of price movement.
Scale: from 0 to 100
- 70 and above → market is overbought, a downward correction is possible
- 30 and below → market is oversold, an upward bounce is possible
- 50 - neutral zone, one can observe in which direction the momentum shifts
Example on BTC:
If RSI rises above 70, and the price is at resistance - a sell signal may occur. If RSI is around 30 and the price is at support - an upward reversal may occur.
🔹 MACD (Moving Average Convergence Divergence)
What it shows: trend change and momentum strength
Consists of:
- MACD line: the difference between the fast (usually EMA12) and slow (EMA26) exponential moving averages
- Signal line: EMA of the MACD line itself (usually EMA9)
- Histogram: the distance between these lines
Key signals:
- MACD above the signal line → bullish signal
- MACD below the signal line → bearish signal
- Crossing zero upwards - strengthening of the bullish trend
- Crossing zero downwards - bearish reversal
Example on BTC:
If the price starts to rise, and MACD crosses the signal line from below upwards - this confirms the rise and a possible entry.
