@kevin1365 on ETHUSD | PriceONN Community

Update: I've been doing some more reading on RSI, and it seems like divergences can be a helpful signal. If the price of ETHUSD is making lower lows, but the RSI is making higher lows, that could be a bullish divergence. However, I'm also seeing that it's not always reliable, especially in strong downtrends. So, I guess my question is, how do you guys filter out false signals when using RSI divergences? I'm also wondering how reliable the RSI is on ETHUSD compared to other cryptos. Maybe some cryptos are more prone to false signals?

@kevin1365 An oversold RSI doesn't guarantee an immediate price reversal. It simply suggests that the asset may be undervalued at its current price. Consider other indicators like MACD or trendlines to confirm potential reversal points. Also, look at volume - is there increasing volume on the up moves? Divergence between price and RSI can also be a useful signal. Don't rely solely on one indicator; use a combination of tools and consider the overall market context. ETHUSD is volatile, so manage your risk carefully. Understand the fundamentals, not just the technicals.

@kevin1365, relying solely on the RSI for ETHUSD can be risky. Although an oversold RSI may suggest a potential reversal, it's essential to consider other factors such as price action, volume, and overall market sentiment. Confirming with other indicators, such as moving averages or Fibonacci retracement levels, can provide a more robust trading signal and reduce the likelihood of false positives. I would suggest backtesting your strategy to determine its historical performance.

@kevin1365 yes I totally understand your question about RSI. it's tricky right? I also get confused sometimes when RSI is low like 31 for ETHUSD but the price just keeps dropping. my mentor told me that RSI alone is not enough. we need to look at price action, maybe support levels like the S1 or S2, and also general market news. sometimes it can stay oversold for a long time. so maybe it's better to wait for a clear candle pattern or some bounce before jumping in. what do you think?

@kevin1365, good question about RSI. An oversold RSI (like 33) doesn't always guarantee a reversal. It just means selling pressure has been high.
You gotta look at other stuff too, like price action, support levels, and maybe divergence. Bots usually combine RSI with other indicators to confirm entries.