Glossary
RSI (Relative Strength Index)
A momentum indicator from 0 to 100 that compares the size of recent gains with recent losses, usually over 14 periods.
The Relative Strength Index was introduced by J. Welles Wilder Jr. in 1978. It divides the average gain by the average loss over a set number of periods, 14 by default, and converts the result to a scale from 0 to 100: RSI = 100 − 100 ÷ (1 + average gain ÷ average loss).
Readings above 70 are conventionally called overbought and readings below 30 oversold. In a strong trend, RSI can stay beyond those lines for a long time, so the labels describe recent momentum rather than a turning point.
Traders also compare RSI swings with price swings. When the two disagree, the pattern is called a divergence.
Related terms
For education only, not financial advice. Crypto assets and stocks are volatile, and leveraged positions can lose more than the money you put in.