Bitcoin Relative Strength Index (RSI) Monthly

Bitcoin's Relative Strength Index (RSI) is a momentum indicator that measures the speed and change of price movements. It ranges between 0 and 100, helping traders identify potential overbought or oversold conditions.

• RSI Above 70 – Bitcoin may be overbought, suggesting a possible correction.
• RSI Below 30 – Bitcoin may be oversold, indicating a potential buying opportunity.
• RSI Between 30-70 – Neutral zone, where BTC is neither strongly overbought nor oversold.

Historically, Bitcoin’s RSI has provided key signals before major price movements. By analyzing previous trends, traders and analysts can better understand market cycles and make informed decisions.

We chose to track monthly RSI instead of daily or weekly because it provides a long-term view of Bitcoin’s price momentum.

• Less noise – Shorter timeframes like daily RSI can be volatile and misleading, while monthly RSI smooths out temporary price spikes and dips.
• Market cycle insights – Bitcoin follows long-term cycles, often spanning several years. Monthly RSI helps detect macro trends in bull and bear markets.
• Investor relevance – For long-term holders, monthly RSI is more useful than daily RSI, which might be more relevant for short-term traders.

By using monthly RSI, we can identify major shifts in Bitcoin’s momentum rather than getting caught up in short-term price fluctuations.

The 14-period RSI is the most commonly used setting in technical analysis, originally developed by J. Welles Wilder.

• Balanced Approach – The 14-period setting avoids extreme fluctuations while still detecting meaningful trends.
• Shorter Period (e.g., 7) – Makes RSI too sensitive, generating frequent but less reliable signals.
• Longer Period (e.g., 30) – Smooths RSI too much, making it slow to react to trend changes.

For monthly RSI, a 14-period setting means we look back 14 months, providing a strong historical perspective while maintaining responsiveness to recent market conditions.

Historically, Bitcoin has moved in cycles of roughly 4 years, making the 14-month RSI a good fit for capturing these long-term trends.

RSI is widely used in technical analysis to complement other indicators such as:

• Moving Averages (50-day, 200-day MA) – Identifies long-term trends.
• MACD (Moving Average Convergence Divergence) – Helps confirm momentum shifts.
• Support & Resistance Levels – RSI can signal trend reversals near key price zones.

Many traders combine RSI with other tools to increase accuracy when making trading decisions

Bitcoin's RSI can be measured across different timeframes:

• Monthly RSI – Long-term trend indicator, useful for macro investors.
• Weekly RSI – Medium-term outlook, common for swing traders.
• Daily RSI – Short-term momentum, used for active trading.
• Intraday RSI – Hourly or minute-by-minute RSI, for day traders.

Each timeframe provides a different perspective on Bitcoin’s strength and momentum.