RSI explained: is the market overbought or oversold?
The Relative Strength Index (RSI) is one of the most popular momentum indicators. It compares recent gains with recent losses and shows the result on a scale from 0 to 100.
The classic levels
- Above 70: the market is often called overbought: price has risen fast.
- Below 30: often called oversold: price has fallen fast.
- Around 50: momentum is balanced.
The default setting is 14 candles.
Overbought does not mean "sell now"
In a strong uptrend, RSI can stay above 70 for a long time while the price keeps climbing. Selling only because RSI is high can mean missing the trend. RSI works best together with the trend and price levels.
Divergence
A useful signal is divergence: the price makes a new high but RSI makes a lower high. This shows momentum is fading and the move may be tiring. The opposite (price lower low, RSI higher low) can hint that selling is weakening.
Adding RSI on Velxen
On the full-screen chart, open Indicators, search "Relative Strength Index" and add it. It appears in its own panel under the price.
Use RSI as one piece of evidence, never as the only reason to trade.
This article is for education only and is not financial advice. Crypto prices can rise and fall sharply; only trade with money you can afford to lose.
