RSI (Relative Strength Index) is an indicator used in trading stocks, assets, cryptocurrencies, etc to tell when an asset is either overbought or oversold.
Let’s take a look at the fundamentals.
Generally the term “overbought” is used when an asset or rather cryptocurrency has had a lot of interest and buying volume and is assumed to have a sell off occurring soon. Usually if something is overbought, it is not seen as a good time to enter in a trade. Overbought is considered when RSI crosses over the 70 line
Opposite of overbought, the term “oversold” generally indicates something has had a lot of panic selling and is crossing over the 30 line, indicating it is oversold. This is usually seen as a time to enter the market, especially if previous pattern indicates that it usually bounces off 30 and starts to gain price action again.
Again, this is not financial or trade advice. This is just the general consensus behind RSI and shouldn’t be used as a guarantee. At the end of the day it is just a mathematical equation that has been adopted over the years as an indicator.
Most people would look for 3 clear signals that they should enter a trade, RSI is just one of them. Again this is depends on the person, trader and numerous amounts of other factors as not every person and every market is the same.
With Cryptolume, you can now do with RSI:
- Global market capitalization value of coins.
- Exchange specific RSI value of coin from every supported exchange.
- RSI alerting for 5, 15, 30 minute and 4 hour / 1 day candles.
- Receive alerting to Desktop/Mobile (via Push notification with Slack)
- More coming soon.
We’ve created a video that explains Cryptolume and the RSI: