rsi

📘 What is RSI?
RSI (Relative Strength Index) measures how fast and how hard price has been moving. It runs from 0 to 100, using the last 14 candles by default.
Above 70 means buyers have pushed very hard (overbought). Below 30 means sellers have (oversold). RSI does not tell you the price is "wrong". It tells you the move is stretched, or that it is losing power. $ETH and $BTC both gave textbook signals in the last 6 weeks. Both are below.
📊 Live chart in the cover and in the image post below.
🔍 How to read it
• Over 70: strong push up. In a bull trend RSI can stay here for days
• Under 30: strong push down. In a crash it can stay here too
• 50 line: above = buyers in control, below = sellers in control
• Bullish divergence: price makes a LOWER low, RSI makes a HIGHER low. Selling is losing steam
• Bearish divergence: price makes a HIGHER high, RSI makes a LOWER high. Buying is losing steam
📈 How traders use it
• Entry: never on the RSI number alone. Wait for the divergence to finish and a candle to close back in the other direction
• Stop-loss: just past the swing low (bullish) or swing high (bearish) that made the divergence
• Target: the nearest support/resistance, or the last swing. Aim for at least 2x your risk
• Use 4H or daily. On 1m-15m charts, divergences appear and fail all the time
🧪 Live example 1: $ETH bullish divergence (4H, Oct 8)
• The Oct 8 12:00 candle dumped to $2,430 and closed at $2,435.66. 4H RSI hit 14.7, extremely oversold
• The next candle went lower, to $2,406.11. But RSI only fell to 23.0 at its close
• Lower low in price, higher low in RSI = bullish divergence
• That candle closed back at $2,464.59, well above its low. ETH then bounced to $2,520.54, +4.8% from the low
• It stalled under the Oct 7 low at $2,538, which is now resistance
🧪 Live example 2: $BTC bearish divergence (daily, late Aug to Sep)
• Aug 27: high $80,849, daily RSI 82.0
• Sep 3: price made a HIGHER high at $82,300, but RSI only reached 73.0
• Higher high in price, lower high in RSI = bearish divergence
• Note: RSI was over 70 from Aug 23 to Aug 27 and price kept rising. Overbought alone was not a sell signal. The divergence was the warning
• BTC then fell to $74,968 on Sep 15, -8.9% from the Sep 3 high
🧪 Where they are now (Oct 11)
• ETH about $2,508. 4H RSI ~40, daily RSI ~41.5. Neutral, leaning weak. It sits under the 4H 20 EMA (~$2,523) and 50 EMA (~$2,581)
• A 4H close above $2,538 with RSI back over 50 would confirm buyers are back
• BTC about $82,950. Daily RSI ~51.7, right on the 50 line. No divergence on the daily right now
• Watch: if BTC retests $80,394 and daily RSI stays above its Oct 8 reading (47), that is a fresh bullish divergence
⚠️ Common mistakes
• Selling just because RSI is over 70. Strong trends stay overbought for a long time
• Calling a divergence before the second swing is complete
• Ignoring the trend: bullish divergences in a strong downtrend often give only a small bounce
• Using RSI alone, with no support/resistance level and no stop
✅ Quick checklist
• Is it on the 4H or daily chart?
• Do price and RSI clearly disagree at two swings?
• Did a candle close confirm the turn?
• Is your stop past the swing, sized to 1-2% risk?
• Is there a clear level to target with at least 2R?
💬 Do you use RSI divergence, or does it fail for you more than it works? 👇
Not financial advice. DYOR.
#TradingTips #RSI #Ethereum