RSI — Relative Strength Index
The most widely used momentum oscillator. Measures the speed and magnitude of price changes to identify overbought and oversold conditions.
What is RSI?
RSI is a momentum oscillator developed by J. Welles Wilder in 1978. It moves between 0 and 100, measuring how strongly price has been moving up versus down over a defined period — typically 14 candles.
Unlike price itself, RSI is bounded. That bounded nature makes it useful for spotting extremes: when buyers have been so dominant for so long that the market is likely stretched, or vice versa.
Key zones
Buyers have dominated for too long. Price may reverse or consolidate. In strong trends, can stay here for extended periods.
Price is trending up with positive momentum. Pullbacks to 50 are often buying opportunities in an uptrend.
Price is trending down. Bounces to 50 are often selling opportunities in a downtrend.
Sellers have dominated for too long. Price may reverse upward. Often signals potential long entries.
RSI signals
RSI exits oversold — potential LONG entry. Price was suppressed, now momentum is recovering.
RSI exits overbought — potential SHORT entry. Price was stretched, now momentum is fading.
Price makes a new high but RSI makes a lower high — hidden weakness. One of the most powerful RSI signals.
RSI crossing 50 confirms trend direction change. Simple but effective trend filter.
Why Wilder smoothing?
Wilder used a specific exponential smoothing — each new average is weighted as (prev × (period−1) + new) / period. This makes RSI respond more slowly than a simple average, reducing noise while still capturing real momentum shifts. Cryphos implements this exactly.