Relative Strength Index

Definition ∞ The Relative Strength Index (RSI) is a technical analysis momentum oscillator that measures the speed and change of price movements for a digital asset. It ranges from 0 to 100 and is primarily used to identify overbought or oversold conditions in the market. An RSI reading above 70 typically suggests an asset is overbought, while a reading below 30 indicates it is oversold. Traders use it to gauge market sentiment and potential price reversals.
Context ∞ In cryptocurrency trading, the Relative Strength Index is a widely utilized tool for technical analysis, helping investors assess market conditions and make informed decisions. Its application is crucial for understanding short-term price dynamics and identifying potential entry or exit points for digital assets. Interpreting RSI signals alongside other indicators assists in formulating trading strategies within the volatile crypto market.