Indicator Overview

The Velocity RSI is an advanced momentum oscillator that refines the traditional Relative Strength Index (RSI) by incorporating Bitcoin’s price velocity, calculated using a lookback and a running moving average (RMA) smoothing. It measures the speed and direction of price changes relative to recent highs and lows, scaled to a 0–100 range.

How To Use

The Velocity RSI oscillates around a 50 midline, with values above 80 (red dashed line, red fill) signaling overbought conditions, often preceding price pullbacks, ideal for profit-taking or shorting. Values below 20 (green dashed line, green fill) indicate oversold conditions, typically aligning with buying opportunities during dips. Historically, red peaks mark speculative tops, while green troughs signal undervaluation. Traders can buy on green dips below 20 and sell on red spikes above 80. Investors may accumulate during oversold periods and reduce exposure in overbought zones, leveraging the indicator’s sensitivity to Bitcoin’s cyclical momentum for precise timing.