# Relative Strength Index

#### What is RSI?&#x20;

The RSI is a momentum oscillator. Think of it like a speedometer for price changes.&#x20;

Range: It moves between 0 and 100.

It compares the magnitude of recent gains to recent losses.

* If the price is going up rapidly with very few down candles, the RSI approaches 100.
* If the price is crashing without relief, the RSI approaches 0.

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#### Main use

RSI is commonly used to answer two questions that moving averages cannot:

1. "Is the price too expensive right now?" (Overbought)
   * When RSI > 70, the asset is considered "overheated." The buyers are exhausted, and a reversal (price drop) is likely.
2. "Is the price too cheap right now?" (Oversold)
   * When RSI < 30, the asset is "oversold." The sellers are exhausted, and a bounce (price rise) is likely.

Use Case: While your current Moving Average tools tell you *what the trend is* (Up or Down), RSI tells you *if the trend is about to end*.
