📈 RSI: the technical indicator that every trader should understand
When someone starts in cryptocurrency trading, one of the first concepts that comes up is the RSI (Relative Strength Index).
Although it sounds technical, it is actually one of the simplest and most useful indicators for interpreting price behavior.
🔍 What is the RSI?
It is a technical indicator that measures the strength and speed of price movements.
It is represented on a scale of 0 to 100 and helps to answer a key question:
👉 Is the asset overbought or oversold?
⚖️ How to interpret it
The most commonly used levels are:
RSI over 70 → overbought zone
The price has risen strongly and a correction could occur.
RSI under 30 → oversold zone
The price has fallen significantly and a bounce could appear.
These levels are not automatic signals, but context alerts.
🧠 A common mistake
One of the most frequent mistakes is using the RSI in isolation.
In strongly trending markets:
-The RSI can remain above 70 for quite a while
-Or below 30 without the price bouncing immediately
That’s why it is recommended to combine it with:
👍General trend
👍Support and resistance
👍Volume
🔄 Divergences: the most interesting signal
The RSI also allows identifying divergences, which can anticipate changes in the market:
💥Bullish divergence:
The price marks lower lows, but the RSI marks higher lows → possible loss of bearish strength.
💥Bearish divergence:
The price marks higher highs, but the RSI marks lower highs → possible exhaustion of bullish momentum.
📌The RSI does not predict price, but helps to understand market behavior.
When used correctly, it allows:
👍Avoid impulsive entries
👍Detect risk zones
👍Improve decision-making
Like any technical indicator, its greatest value lies in how it is integrated into a strategy, not just
⚠️ Educational content. Does not constitute financial advice $ETH $BTC $SOL
