What is RSI overbought? — chart signal explained
RSI scores the last 14 candles from 0 to 100 based on whether the up-moves or the down-moves were bigger. Relentless rallies push the score up; relentless selling drags it down. It's not about the price level itself — it measures how lopsided the recent action has been.
When does it fire? — BaroBara criteria
This signal turns on when the 14-candle RSI climbs above 70 on barobara.
How traders usually read it
Readings above 70 are commonly read as 'this rose too far, too fast.' Traders expect the rally to pause for breath or dip as some people take profits, so they use it to gauge whether chasing the move here feels stretched.
What to watch out for
Overbought also just means buyers are unusually strong. In powerful uptrends, RSI can stay above 70 for days while price keeps climbing — crossing 70 alone is no evidence that a drop is starting.
What the data actually shows (BTC 1d)
The common reading is a drop — but what actually happened matters more. This signal has fired 11 times on BTC 1d; across the most recent 11, price reached the small target (+0.25%) first about 36% of the time. Widen the target to ±1% and it becomes about 45%. A historical probability, not a guaranteed direction — and it shifts with market regime.
Odds and expected value — with symmetric target and stop (±)
Exactly the barobara framing: which side got hit first, +X% or −X%. Target and stop are set to the same %, and the win rate is how often the upside (+X%) was reached first.
| Target = stop (±) | Win rate (+ first) | EV (before fees) |
|---|---|---|
| ±0.25% | 36% | -0.07% |
| ±0.5% | 45% | -0.05% |
| ±0.75% | 55% | +0.08% |
| ±1% | 45% | -0.10% |
| ±1.5% | 64% | +0.42% |
| ±2% | 64% | +0.56% |
Broken down by market regime
⚠️ This table uses a different basis than the symmetric (±) table above — a small +0.25% target with a wide −5.0% stop (fees included). The small target makes the win rate look high while EV is often negative — exactly what signal groups hide. And the same signal behaves differently across regimes.
| Regime | Win rate (+0.25% target) | EV (−5.0% stop) | Sample |
|---|---|---|---|
| Bull market | 88% | -0.48% | N=8 |
Recent occurrences
How far price actually moved the last few times this signal fired (MFE = maximum favorable excursion).
| Date | MFE | Result |
|---|---|---|
| 2024-05-20 | 1.02% | ✅ hit 🔴 stopped |
| 2024-05-26 | 3.24% | ✅ hit |
| 2024-11-09 | 1.83% | ✅ hit 🔴 stopped |
| 2024-11-27 | 4.2% | ✅ hit 🔴 stopped |
| 2024-12-04 | 4.19% | ✅ hit 🔴 stopped |
| 2024-12-06 | 12.25% | ✅ hit |
| 2025-05-08 | 0.0% | — 🔴 stopped |
| 2025-05-22 | 7.57% | ✅ hit |
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