--- title: "What Is the Relative Strength Index (RSI)?" term: "Relative Strength Index (RSI)" type: glossary_term canonical: https://www.moonwire.org/insights/glossary/relative-strength-index.html --- # What Is the Relative Strength Index (RSI)? > A 0-to-100 momentum oscillator comparing the size of recent gains with recent losses. Readings above 70 are conventionally called overbought and below 30 oversold. The **Relative Strength Index (RSI)** is a momentum indicator developed by J. Welles Wilder in 1978. It compares how large recent up-moves have been against recent down-moves and scales the result from 0 to 100. The standard setting, and the one MoonWire uses, is 14 periods. ## How it is calculated 1. For each bar, record the gain (if the close rose) or the loss (if it fell). 2. Average the gains and the losses over 14 bars using Wilder's smoothing, which carries forward part of the previous average rather than dropping old bars abruptly. 3. Compute **RS** = average gain ÷ average loss. 4. **RSI** = 100 − 100 ÷ (1 + RS). If a market only rose, average loss would be zero and RSI would be 100; if it only fell, RSI would be 0. A market whose gains and losses are equal sits at 50. ## Reading the number The traditional thresholds are 70 and 30. Above 70 is called *overbought*, below 30 *oversold* — but those words describe how stretched recent momentum is, not whether price will reverse. Strong trends can hold RSI above 70 for long stretches. ## The bands MoonWire reports Our [multi-timeframe reads](https://www.moonwire.org/insights/glossary/multi-timeframe-analysis.md) label the 14-period RSI on each timeframe with five bands: | RSI | Label | |---|---| | 70 and above | overbought | | 55 to 70 | bullish | | 45 to 55 | neutral | | 30 to 45 | bearish | | below 30 | oversold | The labels are descriptive shorthand for momentum on that chart. "Bullish momentum" means recent gains have outweighed recent losses on that interval; it is not a recommendation. RSI is most informative next to trend strength — a rising market with a falling [efficiency ratio](https://www.moonwire.org/insights/glossary/efficiency-ratio.md) and an RSI drifting down from 70 is describing a trend that is losing force. ## Further reading - [Wikipedia: Relative strength index](https://en.wikipedia.org/wiki/Relative_strength_index) - [Investopedia: Relative Strength Index (RSI)](https://www.investopedia.com/terms/r/rsi.asp) ## Where this appears in MoonWire analysis - [Solana: the 3D floor retreated to a nine-touch level 27% below price as the weekly ceiling closed to 9.44%](https://www.moonwire.org/insights/sol-technical-read-2026-09-10.md) — Sep 11, 2026 - [Ethereum: the monthly trend has turned up for the first time in this stream's record, taking alignment to aligned_up](https://www.moonwire.org/insights/eth-technical-read-2026-09-10.md) — Sep 11, 2026 - [Bitcoin: all three timeframe scans now name the same resistance shelf, 82,575 to 82,850](https://www.moonwire.org/insights/btc-technical-read-2026-09-10.md) — Sep 11, 2026 - [Solana: a new 3D pivot at 110.60 has filled part of the 45% stretch that was empty a week ago](https://www.moonwire.org/insights/sol-technical-read-2026-09-03.md) — Sep 11, 2026 - [Ethereum: the weekly scan has compressed to a 2.85% band - 0.30 of one ATR, the tightest cell on the board](https://www.moonwire.org/insights/eth-technical-read-2026-09-03.md) — Sep 11, 2026 - [Bitcoin: the converged 80,600 floor has left both the 3D and weekly ledgers as price gives back 4.54%](https://www.moonwire.org/insights/btc-technical-read-2026-09-03.md) — Sep 11, 2026 - [Robinhood's Chain Was Framed as an On-Ramp. One Memecoin Ran It Backwards.](https://www.moonwire.org/insights/market-pulse-2026-09-03.md) — Sep 11, 2026 - [Solana: four resistances left the 3D ledger at once - nothing is listed now until 147.825](https://www.moonwire.org/insights/sol-technical-read-2026-08-25.md) — Aug 29, 2026 - [Ethereum: RSI 74.27 on the 3D is the highest reading in this week's nine-cell board](https://www.moonwire.org/insights/eth-technical-read-2026-08-25.md) — Aug 29, 2026 - [Bitcoin: the 3D and weekly scans have resolved to the same 2.79%-wide band, with price 0.20% off its floor](https://www.moonwire.org/insights/btc-technical-read-2026-08-25.md) — Aug 29, 2026 - [Solana: the 76.165 shelf that anchored both the 3D and weekly ledgers has left them](https://www.moonwire.org/insights/sol-technical-read-2026-08-18.md) — Aug 29, 2026 - [Ethereum: the 3D and weekly resistance readings that converged last week have separated again](https://www.moonwire.org/insights/eth-technical-read-2026-08-18.md) — Aug 29, 2026 --- *MoonWire surfaces and summarizes public crypto news.* **General information only — not financial advice.** MoonWire Ltd. is not licensed by ASIC and holds no AFSL. 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