What Is Rsi In Crypto

What is the Relative Strength Index (RSI) in Crypto?

When you look at a crypto price chart, you often see lines and graphs below the main price action. One of the most common and useful tools you'll find there is the Relative Strength Index, or RSI.

The RSI is a momentum indicator. In simple terms, it measures the speed and magnitude of an asset's recent price changes to evaluate whether it is potentially overbought or oversold. Developed by J. Welles Wilder Jr., it's a staple for traders in traditional markets and has been widely adopted for analyzing volatile assets like Bitcoin and other cryptocurrencies.

The indicator is displayed as an oscillator—a line graph that moves between two extremes—and has a reading from 0 to 100.

How to Read the RSI Indicator

The power of the RSI lies in its simplicity. It’s all about a few key levels on its 0-100 scale. Understanding these levels is the first step to using the RSI effectively.

The Key RSI Levels

• Overbought (Above 70): When the RSI moves above 70, it suggests that a crypto asset may be overbought. This means the price has risen significantly and quickly, and the positive momentum might be losing steam. It could indicate that a price correction or pullback is becoming more likely. It is not a direct signal to sell.
• Oversold (Below 30): When the RSI drops below 30, it suggests the asset may be oversold. This implies the price has fallen sharply and the selling pressure could be running out. It might signal that the asset is due for a potential bounce or price reversal. It is not a direct signal to buy.
• Neutral (Between 30 and 70): If the RSI is in this middle range, it indicates that there isn't strong upward or downward momentum. The market is seen as neutral or consolidating.

A Mini Checklist for Using RSI

Here is a simple example of how a trader might use the RSI when looking at a chart for a cryptocurrency like Ethereum.

Scenario: Ethereum's price has dropped for five straight days.

1. Check the RSI: You look at the RSI indicator below the price chart and see that its value is 25.
2. Interpret the Level: Since 25 is below the 30 threshold, this signals a potential oversold condition.
3. Look for Confirmation: This is a crucial step. An oversold signal alone isn't enough. You should look for other signs, such as:
   • Is the price starting to flatten out or form a bullish candlestick pattern?
   • Is trading volume changing?
   • Do other indicators support a potential reversal?
4. Make a Decision: The RSI reading of 25 acts as a warning or an alert. It tells you to pay closer attention because the selling momentum may be exhausted, but it doesn't guarantee the price will go up.

Important Things to Remember

The RSI is a powerful tool, but it is not a crystal ball. Keep these points in mind:

• It's an Indicator, Not a Guarantee: The RSI can give false signals. An asset can remain "overbought" (above 70) for a long time in a strong bull market, and it can stay "oversold" (below 30) for extended periods in a bear market.
• Use it with Other Tools: The RSI is most effective when used in combination with other technical analysis tools, like moving averages, support and resistance levels, and chart patterns. Relying on a single indicator is a risky strategy.

Article updated: October 7, 2025.

The Takeaway

The RSI is a fundamental momentum indicator that helps traders identify potentially overbought and oversold conditions in the crypto market. By understanding its 0-100 scale, with key levels at 30 and 70, you can gain valuable insight into price momentum. However, always remember that it is a supplementary tool and should be used as part of a broader, well-researched trading strategy.