Bitcasino World Cup Raffle Campaign - Win the VIP World Football Championship Experience

How to Use Relative Strength Index(RSI) in Crypto Trading

As a cryptocurrency investor, it is essential to leverage every tool available to maximize profits. Price evaluations can be a challenge to predict, particularly in the cryptocurrency market with over 9,000 cryptocurrencies. 

Relative Strength Index stands as one of those solutions a crypto trader needs, which operates as an indicator that measures the price change of an asset. The momentum oscillator is a brilliant formula from John Welles, who sought to introduce a visual representation of market shifts.

RSI Overview and How to Use the Indicator

The RSI technique was introduced way back in 1978 and oscillated between a reading of 0-100. Technically, a cryptocurrency asset is considered overbought when its RSI surpasses 70. If the same asset moves below 30, a trader can interpret the asset as oversold. 

An overbought cryptocurrency indicates that the specific coin is trading at an increased price, signaling the investor to avert initiating any trade at that point. On the other hand, an oversold crypto-asset suggests that an investor can buy the digital coin. Traders utilize this method to garner more coins and earn more profits before the cryptocurrency attains a logical value.

According to the RSI mechanism, a standard timeframe of 14 periods is used to achieve the best price results when computing the average gain or loss of an asset. Asides from the 30 to 70 range, other versions that exist on the RSI technique include 20 to 80 and 10 to 90. Novice investors use this formula when trying to make trades, as it provides a straightforward and reliable way to reanalyze their strategies. 

Types of RSI Signals

As an indicator, the RSI readings display various signals to a cryptocurrency trader:

Support and Resistance

The RSI method is an essential tool that can show a digital currency’s support and resistance level. Buying activities are usually higher at the support level, which keeps the crypto’s price from sloping downwards. Selling activities tend to be higher at the resistance level of a cryptocurrency, therefore maintaining its value from soaring further.

When displayed on a graph, RSI resistance and support levels are either horizontal lines or sloping trendlines. By analyzing the support and resistance level, investors can understand the trading patterns, an appropriate time to initiate a trade, and the right moment to halt any crypto trading activity.  


RSI indicators also give traders an avenue where they can estimate a cryptocurrency’s trend movement. The trend direction could be a bearish one which hopes to experience a price decline based on specific market considerations. As for a bullish market, the digital currency’s value is set to show an upward trend. 

For instance, In John Hayden’s book, the RSI of a bullish market is signaled at 66.66, while a bearish market is identified at the 33.33 marks. According to the book, the two figures are most suited for determining a bullish or a bearish market.

Double Top and Bottom Pattern

The double bottom pattern aims at foretelling the time a cryptocurrency’s trend will take a shift. RSI shows a double bottom trading signal by generating a buy and sell limit whenever a crypto asset’s price moves below the 30 marks elevating upwards. 

Another buy and sell limit can be generated if the same asset’s value shifts the 70 marks downwards(double top). In a double bottom signal, the asset’s pattern is demonstrated with two identical lows signaling the beginning of new selling pressure.


RSI enables traders to receive a divergence signal showing the indicator’s status per the crypto’s value. It further means that an RSI can exhibit different findings when the digital currency achieves new highs and lows. As a result, it introduces two common categories of RSI divergences, including a bullish and bearish divergence.

A bearish divergence takes place when the asset’s value decreases as the RSI price surges. The divergence happens when the RSI value ascends as the asset’s price plunges on a bullish market. 

Strategies You Can Implement with RSI

RSI and Moving Average Cost Indicator

This technique matches the RSI overbought and oversold signal with the moving average cost indicator. Investors only buy or sell the cryptocurrency once they combine the duo techniques. 

After that, traders should maintain this position until they note a different signal coming from one indicator or see a divergence change on the chart. However, exiting a trade will require investors to monitor the candle until it closes under the lines of the moving average costs.

Relative Vigour Index and RSI

Here, an investor begins to trade after joining both RVI and RSI and receiving similar signals from the indicators. They then stay at that position up to the point one indicator shows a separate signal.

Price Action Trading and RSI

This strategy links the RSI overbought and oversold signals with any price indicating tools like candlesticks, trendlines, or chart patterns. Investors only access a trade with a price signal or an RSI signal. 


RSI tactics make it easier to trade in the crypto market with minimal risks as it estimates the point at which a cryptocurrency is overbought and oversold. 

Bitcoin live price
price change

Furthermore, the momentum indicator also serves crypto traders with other functions such as determining the support and resistance level, trends, and divergence shifts in the trading network. As a bonus, combining RSI with other indicators boosts the investor’s shot of a profitable trade.

Stay up to date with our latest articles

More posts

5 Best Crypto Coins for Online Casinos

Playing with crypto at an online casino is an increasingly popular pastime for many cryptocurrency holders or casual players. These web-based platforms function similarly to traditional web-based casinos. However, they allow you to deposit, gain, and withdraw crypto at numerous games, including Blackjack, Roulette, Poker, slots, etc. Some players have problems choosing the best cryptocurrency for an online crypto casino games. As you may know, the crypto market is prone to intense volatility and unexpected turns of events. This means…

What is Web 5? Jack Dorsey’s Alternative to Web 3

On June 10th, Jack Dorsey announced a new project being built by Block’s bitcoin-focused business unit, TBD. That project is known as “Web 5” – a so-called “extra decentralized web” that “puts you in control of your data and identity.” What could the Block Head have in mind with this new creation? Also, what happened to Web 3? A Decentralized Data Storage Solution When Jack Dorsey announced Web 5 over Twitter, he said it would be Block’s “most important contribution…

Top 5 Crypto Portfolio Trackers To Use in 2022

An active cryptocurrency trader cannot do without the support of a crypto portfolio tracker. Not if they want to be successful at trading or investing. A crypto portfolio tracker is an app enabling you to monitor the amount and value of your crypto assets across all wallets, exchanges, platforms, and blockchain networks in real-time. It allows you to track historic transactions, live crypto prices, gains, and losses. Above all, it prevents you from mismanaging your portfolio while getting the best…

Five Gold-Backed Crypto to Consider in the Current Inflationary Economy

Many traders are optimistic about the blockchain's development potential and recognize that volatility is inevitable with new technology. Some are asking how to invest in digital assets while maintaining some degree of stability. A relevant part of investors frequently mentions stablecoins as a valid investment alternative. Anchoring the value of crypto to a fiat currency can undoubtedly sound appealing. However, fiat money depreciates as inflation increases, making stablecoins less valuable. In this particular context, the crypto market is offering a…

What Are the Differences Between Stop-Loss Orders and Portfolio Stop Loss?

In a volatile market like crypto, investors always look for ways to protect their assets. In this market, just like any other, nobody wants to lose money. Consequently, it's essential to introduce a price floor for the value of your assets. These situations can benefit from stop-loss orders or portfolio stop losses. However, some people have trouble figuring out where they should set their prices. If you set them up too far away, you could lose a lot of money…

Can Hackers Steal Your NFTs? Understanding How Criminals Operate

In a world where NFTs are becoming more and more valuable, NFT theft is a real threat. Criminals and technology are evolving, and users need to move with care in this growing market. Our guide will provide more details on this dangerous trend and share guidelines on reducing the risk of NFT theft. Stealing NFTs – Myth or Reality? When it comes to staling NFTs, exploiting human mistakes is the most typical strategy for a hacker. Without the hacker's access…

Ethereum Name Service (ENS) – A Simple Guide

People can choose domain names that are easy to remember for their wallet addresses, thanks to the Ethereum Name Service (ENS). The secret to this technology is using a computer to understand this domain. When it comes to Web3 communication, ENS has the potential to make all the difference. In this guide, we'll go through some possible reasons for this. Ethereum Name Service (ENS) – A Definition To find out what a specific Ethereum address is, people can use the…

A Beginner’s Guide to the Impermanent Loss Phenomenon

Decentralized finance, or DeFi, presents several hazards to investors. Impermanent loss is a significant concern when dealing with this growing market. This guide will explore the meaning of impermanent loss concerning the liquidity pool. Moreover, the guide will also discuss how to calculate the difference and reduce the risk of this phenomenon. Grasping the Notion of Impermanent Loss There is a high probability of impermanent loss in every given situation. A net difference in the value of two tokens in…

NFT Minting – What Do We Know about Its Environmental Costs?

A multi-billion dollar sector was born out of the non-fungible token (NFT) market in 2021. Environmentalists are increasingly alarmed about the ecological impact of this growing sector.  Is NFT minting a cause for concern for our planet's environment? What options do we have in resolving this problem? These crucial questions will be the core of today’s guide. Minting New NFTs Minting, the act of adding a specific item to the blockchain, is similar to producing a physical coin. It has…

Fair Launch vs. Pre-Sale – What Is the Difference?

Every time we see a new crypto project entering the market, we notice different ways to launch a token. One of the teams' most common choices is leaving (or not) access to the token to early investors. In this context, we have all heard about pre-sales and fair launches. These two strategies represent different approaches to the crypto market. Our guide will clarify the main features of the two funding rounds for our readers. Launching a Crypto Project – Preliminary…