Hunt4Coin

How to read RSI and MACD on crypto charts

Published · by Hunt4Coin

RSI shows how strong recent price moves have been on a 0–100 scale, and MACD shows whether a short-term trend is speeding up or slowing down compared with a longer one. Used together, they help you judge momentum, not predict the future.

RSI (Relative Strength Index)

RSI compares the size of recent up-moves with recent down-moves, usually over 14 candles, and scales the result from 0 to 100.

  • Above 70: price has risen fast; often called overbought. In a strong uptrend RSI can stay above 70 for a long time, so it is not a sell signal by itself.
  • Below 30: price has fallen fast; often called oversold. In a downtrend it can stay low.
  • Around 50: the line between bullish and bearish momentum. Many traders use a rise back above 50–55 as a sign momentum is turning up.
  • Divergence: price makes a higher high but RSI makes a lower high (bearish divergence), or price makes a lower low while RSI makes a higher low (bullish divergence). It hints that the move is losing strength.

MACD (Moving Average Convergence Divergence)

MACD takes the gap between a fast and a slow exponential moving average, by default the 12- and 26-period EMAs, and draws a signal line (a 9-period EMA of that gap). The histogram is the distance between the two.

  • MACD crosses above the signal line (histogram turns positive): short-term momentum is improving.
  • MACD crosses below the signal line (histogram turns negative): momentum is fading.
  • Above or below zero: above zero, the fast average is above the slow one (an uptrend on that timeframe); below zero, the opposite.
  • Shrinking histogram bars: the move is slowing, often before a cross.

Using them together

  1. Check the bigger trend first. On the daily chart, is price above its 200 EMA? Momentum signals that agree with the bigger trend tend to be more reliable than ones that fight it.
  2. Use RSI for strength, MACD for timing. For example: in an uptrend, wait for RSI to recover above 50 and for the MACD histogram to turn positive.
  3. Confirm on more than one timeframe. A signal on the 1-hour chart means more when the 4-hour or daily chart agrees.
  4. Plan the exit before the entry: where you take profit, where you're wrong, and the fees you'll pay both ways.

Common mistakes

  • Selling just because RSI is above 70 in a strong uptrend.
  • Treating every MACD cross as a trade: in sideways markets they flip back and forth.
  • Ignoring fees on small targets: a +1% move can shrink to +0.2% at high fees. See exchange fees.
  • Testing an idea only by looking at a few charts instead of backtesting it.

Try it free

  1. Open any coin, for example Bitcoin, and add Relative Strength Index and MACD from Indicators; change their settings and levels as you like (all 28 indicators).
  2. Find coins with oversold RSI or a fresh MACD cross in the crypto screener.
  3. Test a rule such as "RSI(14) crosses above 30 and price is above EMA(200)" in the backtester, with fees.
  4. Practise it with pretend money in paper trading.

Information only, not financial advice. Indicators describe past prices; they don't guarantee what happens next.