What it means
The Relative Strength Index (RSI) compares the size of upward and downward closing-price changes on a scale from 0 to 100. Think of it as a way to describe the balance of recent gains and losses. The lesson uses the common 14-period version with Wilder's smoothing, which carries some influence from older price changes into each new reading.
A period is a chart interval. Fourteen one-hour candles and fourteen daily candles describe very different spans. RSI is also different from comparing one asset's performance with another: its name refers here to the balance of gains and losses within the same price series.
Conventionally, RSI above 70 is described as overbought. Recent upward changes have been strong relative to downward changes. This does not establish that the asset is fundamentally overvalued or that it must fall next.
Conventionally, RSI below 30 is described as oversold. Recent downward changes have been strong relative to upward changes. The asset is not necessarily cheap, and buyers have not necessarily regained control.
RSI offers another view of the balance of recent price changes. It can help describe strong momentum, stretched conditions or a change in that balance. It does not measure valuation, liquidity, transaction costs or how much risk a trader should take.
In CoinScreener
CoinScreener provides RSI Overbought and RSI Oversold alerts on 4h, 1D and 1W. An extreme on a four-hour chart can coexist with an ordinary weekly reading. Decide which horizon is relevant rather than treating them as contradictory commands.
The detail screen labels the condition as RSI Overbought or RSI Oversold and shows the timeframe, market context, RSI and price-related evidence. Inspect the candle-close time and the current market before deciding what action remains practical.
CoinScreener alerts flag conditions; a strategy Signal supplies reference trade levels. If you review earlier alerts, check how long the app measures price movement afterward. A move after an alert is different from a trade result with a defined entry, exit and costs.
The lower panel places RSI on the same time axis as price. The 30 and 70 reference lines help orient the reading; an overbought observation alone does not establish that the rising trend has ended.
Three checks
- Read the trend first. Is price rising steadily, falling steadily or moving sideways? A high or low RSI can reflect the strength of that trend.
- Locate nearby structure. Support and resistance give context to the potential reward and invalidation.
- Size and plan the exit. Use an explicit loss budget and allow for imperfect execution. Avoid adding to a losing position simply because RSI is even more extreme.
Explore examples
Explore the chart lesson
Switch between the rising and falling scenarios. In both, the RSI extreme lasts while the price trend continues. These examples deliberately challenge the idea that an extreme must immediately reverse.
Begin with the context
RSI compares upward and downward closing-price changes. The lower panel calculates a 14-period RSI from the hypothetical prices above.
Illustrated walkthrough · all scenarios
Overbought persists
- Begin with the context. RSI compares upward and downward closing-price changes. The lower panel calculates a 14-period RSI from the hypothetical prices above.
- Momentum reaches an extreme. RSI moves above 70. Strong recent buying is visible, but sellers have not necessarily taken control.
- The trend continues. Price keeps moving in the same direction while RSI stays extreme. Taking the opposite side just because of RSI would be trading against this continuing trend.
- Wait for price evidence. The trend has continued through the extreme reading. Check nearby price levels, what would make your idea fail, and the cost of entering before deciding to trade.
Oversold persists
- Begin with the context. RSI compares upward and downward closing-price changes. The lower panel calculates a 14-period RSI from the hypothetical prices above.
- Momentum reaches an extreme. RSI moves below 30. Strong recent selling is visible, but buyers have not necessarily taken control.
- The trend continues. Price keeps moving in the same direction while RSI stays extreme. Taking the opposite side just because of RSI would be trading against this continuing trend.
- Wait for price evidence. The trend has continued through the extreme reading. Check nearby price levels, what would make your idea fail, and the cost of entering before deciding to trade.
The 30 and 70 lines mark conventional reference levels. An RSI of 75 does not mean a 75% chance of a fall. Read the value as momentum context and the alert label as the condition CoinScreener observed.
Sources
Product behavior checked against V3 source on 9 September 2026. Screenshots retain their original capture dates.
Fidelity: Relative Strength Index trading with momentum lesson
