What is RSI?
A 0-100 gauge of how one-sided recent price moves have been. It measures momentum, not value — and it never says a price is too high.
Updated August 29, 2026
What it measures
RSI compares the size of recent gains to the size of recent losses over a window — usually 14 candles — and expresses the balance as a number from 0 to 100. Above 50 means the up moves have been bigger than the down moves; below 50, the opposite.
That is the whole of it. It knows nothing about value, volume, news or where price is relative to anything. It is a description of the recent candles and nothing more.
The 70 / 30 misunderstanding
The textbook reading — above 70 is overbought, below 30 is oversold — is the single most expensive misreading in technical analysis. "Overbought" does not mean "due to fall". It means the move up has been one-sided.
In a strong trend RSI can sit above 70 for weeks while price keeps rising, and every reading is correct: the buying really is one-sided. Selling because a number crossed 70 is betting against the strongest evidence of a trend you have.
Divergence — the part worth watching
The useful case is when price and RSI disagree. Price makes a higher high while RSI makes a lower one: the new high was achieved with less one-sided buying than the previous one. Momentum is fading even though price is not.
The mirror case is a lower low in price with a higher low in RSI — selling pressure fading while price still falls.
Divergence describes a disagreement, not a signal. It says "this move is thinner than the last one", which is a reason to look closer at what else is happening, not a reason to act on its own.
Timeframe changes the answer
RSI on 15 minutes and RSI on the daily chart routinely say opposite things about the same coin, and neither is wrong — they are measuring different windows.
The rule is the same as for everything else on the chart: read it on the timeframe you are trading. An hourly RSI at 75 is meaningless to someone holding for weeks, and a daily RSI at 45 is meaningless to a scalper.
Common questions
- Does RSI above 70 mean I should sell?
- No. It means recent gains have outweighed recent losses by a wide margin, which is what a strong uptrend looks like. RSI can stay above 70 for weeks while price keeps climbing.
- What is RSI divergence?
- Price and RSI moving in opposite directions — a new price high without a new RSI high, or a new price low without a new RSI low. It says the latest move carried less momentum than the previous one; it does not say when or whether price will turn.
- Which RSI period should I use?
- 14 is the default and the one most participants watch, which matters more than the mathematics — a level works partly because others are looking at the same number. Change it only if you know why.