Definition
RSI, short for Relative Strength Index, is a technical analysis concept used to evaluate the strength of recent price movements in a cryptocurrency or other asset. It expresses this strength as a numerical value on a fixed scale, typically ranging from 0 to 100. Higher values indicate stronger recent upward price moves, while lower values indicate stronger recent downward moves.
As a momentum-based measure, RSI helps describe whether price action has been unusually strong or weak over a recent period. It is often interpreted in relation to potential overbought or oversold conditions, which can be viewed alongside factors such as volatility and market sentiment. RSI does not predict future prices on its own, but it summarizes recent price behavior in a standardized way.
Context and Usage
In crypto trading contexts, RSI is commonly referenced on price charts to characterize the intensity of recent buying or selling pressure. It is considered a momentum oscillator, meaning it fluctuates within a bounded range rather than expanding with price levels. This makes it easier to compare conditions across different assets and timeframes.
RSI is often discussed together with other market concepts such as volatility and market sentiment to form a broader view of current conditions. While it can be affected indirectly by trading frictions like slippage when prices move quickly, RSI itself remains a purely price-based calculation. As a concept, it serves as a compact summary of how aggressively prices have moved over a selected recent period.