CCI (Commodity Channel Index)
The idea behind CCI is 'how far has price wandered from its usual path?' For each candle it averages the high, low, and close to get a typical price, then measures how far that sits from the average of the last 20 candles. It also accounts for how much price usually swings — a normal-sized swing produces a small number, and a much-bigger-than-usual deviation produces a big one.
Read the scale like this: near 0 is around the average, above +100 is stretched above the usual range, below -100 stretched below it. By the designer's intent, roughly 70–80% of readings land inside ±100, so anything outside means 'an unusually large deviation.' Since it isn't boxed into 0–100 like RSI, sharp rallies and crashes can push it to ±200 or even ±300.
The 'Commodity' in the name is there because it was built in 1980 to analyze commodity futures markets (gold, grains, and the like). Today it's applied to anything with price data — stocks, crypto, whatever. Don't let the name make you think it's something special.
Interpretation splits into two camps. The mean-reversion camp says below -100 means 'too far from the usual path, it will come back to the average' and expects a bounce. The trend-following camp reads a +100 break as 'evidence a strong move has started' and follows that direction instead. Opposite readings of the same number, coexisting.
Which camp is right depends on market conditions. In sideways markets, reversion looks frequent; in trending markets, CCI commonly parks outside ±100 while price keeps going. The problem is you only find out whether it was a sideways or trending market after the fact. So the honest use of CCI is as a status light — 'price is outside its usual range' — with everything beyond that checked against historical data.
What the data actually shows
Did Bitcoin actually bounce after CCI dropped below -100? Did it really keep climbing after crossing +100? Barobara counts every past instance and publishes the outcome distribution as-is. The verdict: like other overbought/oversold indicators, mostly near a coin flip. See the CCI oversold (1h) actual results, the CCI overbought (1h) actual results, and for a longer horizon, the daily oversold. Even where a condition looks like it has a high win rate, it can be an artifact of how the profit target was set — we recommend checking expected value alongside it in the setup catalog.Common misconceptions
A common misconception is 'CCI below -100 = undervalued, time to buy' — but CCI has nothing to do with valuation. It only measures deviation from the last 20 candles' average, so in a downtrend it's perfectly natural for CCI to sit below -100 while price keeps falling. There's also the claim that 'CCI is a commodities-only indicator, so it doesn't work on crypto' — the calculation is a generic formula that applies to any price data. In every market alike, the same thing holds: it's a status readout, not a prediction tool.
FAQ
Q. What's the difference between CCI and RSI?
RSI measures the ratio of recent up-moves to down-moves on a 0–100 scale; CCI measures the distance from the average price on an unbounded scale. In big surges and crashes both run to extremes and move similarly, but CCI keeps growing the further price deviates. Neither is a direction-prediction tool.
Q. CCI just crossed +200. Does it drop now?
Unknowable. +200 means 'very far outside the usual range' — which could be a sign of an imminent drop, or evidence that a very strong rally is in progress. In strong trends, extreme readings often persist while price keeps going. The only honest answer is to check how similar past situations actually ended.