True Strength Index Bitcoin Analysis & TSI Signals
TSI Indicator
Created by William Blau
True Strength Index is a momentum indicator. The TSI is drawn by using a momentum calculation that reacts faster and is more responsive to bitcoin price changes, making it a leading indicator that follows bitcoin price action direction closely in the bitcoin market.
The TSI is drawn as a blue line, the indicator also plots a signal line which is drawn as a red line, and these two lines are used to generate cross over signals.
TSI also plots a histogram which illustrates difference between the TSI Line & the Signal line. This histogram crosses above or below the centerline, histo-gram levels above the centerline indicates a bullish cross over signal, while centerline levels below the centerline illustrates bearish crossover signal.
BTCUSD Analysis & Generating Signals
The TSI uses various methods to generate crypto signals. This cryptocurrency indicator can be used in the same way as the RSI to figure out general bitcoin trend direction of the prices. Over-bought and over-sold levels can also be illustrated using TSI. Most regular methods of generating trading signals are:
Zero line Cross-over ( Histogram BTCUSD Trading crossover not Lines crossover)
- Buy - when the histogram crosses above 0 a buy is generated
- Sell - when the histogram crosses below Zero a sell signal is generated
Bitcoin Signal line BTCUSD Trading Crossover
- A buy is generated when the TSI line crosses above Signal-line
- A sell is generated/derived when the TSI line crosses below Signal Line
This signal is the same as the one above & the timing corresponds with the time when the histogram cross over happen.
Divergence Bitcoin CryptoCurrency Trading
Divergence setup is used to look for potential bitcoin trend reversal point of bitcoin crypto. Reversal divergence setups are:
Classic BTCUSD Trading Divergence
Bitcoin Trade Classic Bullish Divergence Trading Setup: Lower lows in bitcoin price & higher lows on the indicator
Bitcoin Trade Classic Bearish Divergence Setup: Higher highs in bitcoin price & lower highs in the trading indicator
Divergence trading also can be used in identifying potential bitcoin trend continuation points in bitcoin price action direction. Continuation divergence setups are:
Hidden Bitcoin Divergence Trade Setup
Bitcoin Hidden Bullish Divergence: higher lows in bitcoin price and lower lows on the indicator
Bitcoin Hidden Bearish Divergence: lower highs in bitcoin price and higher highs in the indicator
Overbought/Over-sold Levels on Indicator
This can be used to identify overbought & oversold conditions in bitcoin price action movements.
- Overbought condition - levels being higher than the +25 level
- Over-sold condition - levels being lesser than the -25 level
Trades can be generated/derived when TSI crosses these technical levels.
Buy signal - when the levels cross above -25 level a buy signal is generated.
Sell trading signal - when the areas cross below +25 level a sell signal is generated.
Over-sold
Overbought
The overbought/oversold levels are indicated using horizontal lines drawn at the +25 & -25 levels.
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