RSI (Relative Strength Index)

What is RSI?

The Relative Strength Index (RSI) is a momentum indicator developed by J. Welles Wilder Jr. in 1978. It measures the speed and magnitude of recent price changes on a scale from 0 to 100.

RSI helps traders identify when an asset is potentially oversold (undervalued) or overbought (overvalued).

RocketDip uses Wilder's Smoothing Method with a 14-period lookback — the industry standard used by TradingView, Binance, and every major charting platform.

The Calculation

1. Calculate daily price changes over 200 days of historical data
2. Separate gains (up days) and losses (down days)
3. Calculate the initial average gain and average loss over the first 14 periods
4. Apply Wilder smoothing: avgGain = (prevAvgGain × 13 + currentGain) / 14
5. Compute RS (Relative Strength) = Average Gain / Average Loss
6. RSI = 100 - (100 / (1 + RS))

Bitcoin is a volatile asset, and RSI helps identify when the market has potentially overreacted in either direction. Historically, Bitcoin RSI dropping below 30 has preceded significant price recoveries.

RocketDip awards up to 3 points (out of 10) for low RSI values because oversold conditions are one of the strongest buy signal indicators.

We compute RSI from 200 days of historical closing prices from CoinGecko. You can verify our value on TradingView by checking the RSI (14) indicator.