The Relative Strength Index (RSI) is a effective momentum indicator, however many buyers misuse it. RSI doesn’t simply show when a coin is “overbought” or “oversold”—it gives clues approximately fashion reversals and energy.
A reading above 70 usually alerts overbought situations, while beneath 30 manner oversold. But here’s the important thing: Don’t trade just on these numbers.
Instead, integrate RSI with charge movement. If RSI is above 70 but the price continues rising with volume, that would mean a robust breakout is occurring. On the turn facet, if RSI is below 30 and forming bullish divergence (RSI going up at the same time as rate keeps falling), it is probably a sign of a reversal.
For excellent outcomes, use RSI with a 14-day setting on the 4H or Daily chart. Always set forestall-losses and keep away from trading RSI in isolation—use it with guide/resistance zones for higher accuracy.