Calculating the Relative Strength Index (RSI) for Bitcoin in Excel
The Relative Strength Index (RSI) is a popular technical indicator used to measure the strength of an asset’s price movement. In this article, we will explain how to calculate the Bitcoin RSI in Excel using historical price data.
What is RSI?
The RSI is calculated as the ratio of how much the price has changed (from a 26-period moving average) due to the most recent price change compared to the previous period’s price change. In a strong downtrend or uptrend, the RSI reading will be oversold, while in a strong uptrend, the RSI reading will be overbought.
Step-by-Step Instructions
- Open Excel: Open the Excel spreadsheet where you want to calculate the Bitcoin RSI.
- Set up columns: In your Excel spreadsheet, set up two columns A and B with the following headings: “Date” (column A) and “Close” (column B).
- Create new column: Create a new column (let’s call it C) that will store the RSI values.
- Calculate 26-period moving average
: In cell D2, enter the formula:
=A2/A2+0.92*(B2-B1)to calculate the 26-period moving average of the “Close” column (A).
- Calculate the latest price change: In cell E2, enter the formula:
=(B2-D2)*100to calculate the latest price change.
- Calculate RSI: Enter the formula in cell F2:
=IF((E2/E1)>0.8,(F2/F1)+((F2-F1)/F1)5,(1-F2/F1))100to calculate the Bitcoin Relative Strength Index (RSI).
- Copy and Paste: Copy the formula in cell F2 and paste it below the cell where you want to display the RSI.
Formulas or Steps:
To accurately calculate RSI using historical price data, follow these steps:
- Set up a pivot table or use Excel’s “Rank” function to calculate a 26-period moving average.
To calculate the most recent price change, use the formula “=A2/A2+0.92(B2-B1)”.
To calculate RSI, use the formula =(B2-D2)100.
Tips and Variations
You can use different moving averages, such as 50 or 100 periods, by changing the number in the formula (e.g.=A2/A2+0.85(B2-B1)’).
You can use other formulas to calculate RSI, such as =(B2-D2)100' or=(B2/B1)-((B2-B1)/B1)’.
- You can also use Excel add-ins, such as the Intricter add-in, which provides more advanced technical analysis capabilities.
Conclusion
Calculating the Bitcoin Relative Strength Index (RSI) in Excel is a simple process that requires basic knowledge of Excel formulas and moving averages. By following these steps and using the formula or steps provided, you can accurately calculate Bitcoin RSI using historical price data.