> For the complete documentation index, see [llms.txt](https://docs.blockhorizon.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.blockhorizon.io/chart-tutorials/planb/planb-rsi.md).

# PlanB RSI

##

## Tutorial: Bitcoin Relative Strength Index (RSI) Indicator

### Summary

The **Relative Strength Index (RSI)** is a momentum indicator that measures the speed and magnitude of Bitcoin’s price movements.

* It ranges from **0 to 100**, showing overbought or oversold conditions.
* High RSI often signals overheated markets; low RSI suggests undervaluation.
* RSI helps identify **short- to mid-term cycle turning points**.

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## Steps to Use the Bitcoin RSI Indicator

1\. Understand the Concept

* RSI Formula: Compares average gains vs. average losses over a period.
* Scale: Above 70 = overbought; Below 30 = oversold.
* Relevance: Captures trader sentiment and market momentum.

2\. Interpret the RSI Chart

* Dots (RSI values): Colored by months until halving (red = far, blue = near).
* Yellow line: RSI average smoothing trend.
* High RSI peaks: Indicate overheated rallies.
* Low RSI troughs: Suggest accumulation opportunities.

3\. Analyze Historical Patterns

* Cycle tops: Often align with RSI > 90.
* Cycle bottoms: Commonly appear when RSI < 40.
* Halving connection: RSI patterns tend to reset and rise after halvings.

4\. Make Decisions

* During high RSI (>70): Be cautious, markets may correct.
* During low RSI (<40): Consider accumulation opportunities.
* Watch averages: Confirm short-term signals with the longer RSI average.

## Tips

* Use RSI with moving averages for stronger confirmations.
* Compare RSI peaks across cycles to spot repeating patterns.
* Monitor halving-colored dots for timing context.
* Combine with S2F or 200WMA for macro alignment.
* Avoid relying on RSI alone; context is essential.

## How to Use the Indicator Effectively

RSI helps detect **momentum shifts** and cycle extremes.\
It is best applied to:

* Identify potential tops (overbought).
* Spot bottoms (oversold).
* Align entries and exits with **cycle momentum** rather than only price.

***

## Created By

### Created By: The RSI was originally developed by **J. Welles Wilder Jr.** and adapted here for Bitcoin by PlanB.