RSI Bitcoin Indicator Overbought and Over-sold Levels
RSI indicator values of above 70 are regarded and considered to be over bought: bitcoin traders consider points above the 70 level as market tops and good points for taking and booking profits.
RSI values of below 30 are regarded and considered to be over sold: bitcoin traders consider points below the 30 level as market bottoms and good points for taking profits.
These overbought and oversold bitcoin trading levels should be confirmed by RSI center line crossovers cryptocurrency trading signals. If these regions give a market top or bottom, this cryptocurrency signal should be confirmed with RSI centerline crossover signal. This is because these overbought and over-sold levels are prone to giving whipsaws in the btcusd market.
In the crypto example illustrated below, when the RSI hit 70, it showed that the bitcoin trading was overbought, & this could be considered as a trading signal that the bitcoin trend could reverse.
The crypto chart then reversed the bitcoin trend after a short while and started to move downward, until it got to the oversold levels. This was considered a market bottom after which the cryptocurrency chart started to move upward again.
Overbought & Over-sold Levels - RSI Bitcoin Strategies
Over Extended Over-bought & Oversold Levels
When the btcusd market is trending strongly upwards or downwards the RSI crypto indicator will stay at these over-bought and over-sold levels for a long time. When this happens these overbought and oversold regions can not be used as cryptocurrency market tops and cryptocurrency market bottoms because the RSI cryptocurrency indicator will stay at these levels for an extended period of time. This is the reason why we say that the overbought and over-sold regions are prone to bitcoin trading whipsaws and it's best to confirm these cryptocurrency signals using RSI center-line crossover strategy.
Over Extended Over-bought & Over-sold Levels - RSI Bitcoin Indicator Strategy
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