The use of oscillators in technical analysis: RSI, Stochastic, MACD, etc.

by | March 27, 2023 - 12:53

In this article, we will explore the use of oscillators in technical analysis, specifically the Relative Strength Index (RSI), Stochastic, and Moving Average Convergence Divergence (MACD), and how they can help crypto day traders.

What are oscillators?

Oscillators are technical indicators that are used to identify overbought or oversold conditions in an asset. They do this by measuring the momentum of an asset and comparing it to its price. The basic premise behind oscillators is that price movements tend to be cyclical, and oscillators help traders identify these cycles.

There are many different types of oscillators, but the RSI, Stochastic, and MACD are among the most widely used. Let’s take a closer look at each of them.

basic premise
The basic premise behind oscillators is that price movements tend to be cyclical, and oscillators help traders identify these cycles.

Relative Strength Index (RSI)

The Relative Strength Index (RSI) is a popular oscillator used to measure the momentum of an asset. It was developed by J. Welles Wilder Jr. in the late 1970s and has been widely used ever since. The RSI ranges from 0 to 100 and is typically calculated over a 14-day period.

The RSI is calculated by comparing the average gains and losses over a given period. When the RSI is above 70, it is considered overbought, and when it is below 30, it is considered oversold. Traders use the RSI to identify potential trend reversals, as well as to confirm trends.

In crypto day trading, the RSI can be particularly useful for identifying overbought or oversold conditions in an asset. When the RSI is overbought, it may indicate that the asset is due for a price correction, and when it is oversold, it may indicate that the asset is undervalued and due for a price increase.

Stochastic

The Stochastic oscillator is another popular momentum indicator used in technical analysis. It was developed by George Lane in the 1950s and is widely used by traders to identify overbought and oversold conditions in an asset.

The Stochastic oscillator measures the momentum of an asset by comparing its closing price to its price range over a given period. The Stochastic oscillator ranges from 0 to 100, with readings above 80 indicating overbought conditions and readings below 20 indicating oversold conditions.

In crypto day trading, the Stochastic oscillator can be particularly useful for identifying potential trend reversals. Traders may look for divergences between the Stochastic oscillator and the price of an asset, which can be an indication that a trend reversal is imminent.

Moving Average Convergence Divergence (MACD)

The Moving Average Convergence Divergence (MACD) is a popular oscillator used in technical analysis. It was developed by Gerald Appel in the late 1970s and has been widely used ever since. The MACD measures the momentum of an asset by comparing its short-term and long-term moving averages.

The MACD consists of two lines: the MACD line and the signal line. The MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The signal line is a 9-day EMA of the MACD line. When the MACD line crosses above the signal line, it is considered a bullish signal, and when it crosses below the signal line, it is considered a bearish signal.

In crypto day trading, the MACD can be particularly useful for identifying trend reversals and changes in momentum. Traders may look for divergences between the MACD and the price of an asset, which can be an indication that a trend reversal is imminent.

Another way to use the MACD is to look for crossovers between the MACD line and the signal line. When the MACD line crosses above the signal line, it may indicate that the asset is about to experience a bullish trend, while a crossover below the signal line may indicate a bearish trend.

Choosing the right oscillator for crypto day trading

There are many different types of oscillators that can be used in technical analysis, but choosing the right one for crypto day trading depends on a variety of factors, including the trader’s personal preferences, the time horizon of their trades, and the specific characteristics of the assets they are trading.

For example, the RSI may be particularly useful for short-term trades, while the MACD may be better suited for longer-term trades. Traders may also want to consider other factors, such as the volatility of the asset, its liquidity, and the overall market conditions.

It is also important to note that no oscillator is perfect, and traders should use them in conjunction with other technical analysis tools and indicators to make informed trading decisions. Additionally, traders should always practice good risk management and set stop-loss orders to limit their potential losses.

Conclusion

In conclusion, oscillators are a powerful group of indicators that can be used in technical analysis to identify overbought or oversold conditions in an asset. The RSI, Stochastic, and MACD are among the most widely used oscillators and can be particularly useful for crypto day traders.

However, traders should choose the oscillator that best suits their personal preferences and trading style, and always use it in conjunction with other technical analysis tools and risk management strategies. With the right tools and strategies in place, crypto day traders can make informed decisions and potentially profit from the fast-paced and exciting world of crypto trading.

Coin Push Crypto Alerts stands as a testament to the power of mathematical algorithms and data-driven analysis in providing actionable insights to traders. By prioritizing reliability and transparency, Coin Push Crypto Alerts empowers traders to make informed decisions and navigate the complex crypto market with confidence.

And always remember – No fortune telling, just math!

With Coin Push Crypto Alerts leading the way, traders can trade smarter, not harder, and seize the countless opportunities that the crypto market has to offer. Choose reliability, choose transparency, and install Coin Push Crypto Alerts.

This article is for informational purposes only and does not constitute financial advice. Please conduct your own research before making any investment decisions.

Feel free to "borrow" this article — just don’t forget to link back to the original.

Dean J. Driessen

Dean J. Driessen

Editor-in-Chief / Coin Push Dean is a crypto enthusiast based in Amsterdam, where he follows every twist and turn in the world of cryptocurrencies and Web3.

How is AI changing cryptocurrency trading and platform resilience?

AI agents like Aixbt are increasingly analyzing market events in real-time, noting platforms like Hyperliquid that maintained performance during recent volatility. These systems highlight how decentralized exchanges can outperform during stress tests, separating...

Latest News

Fed Ends Reputational Risk Scrutiny in Win for Crypto

The U.S. Federal Reserve has eliminated reputational risk from its bank supervision framework, marking a pivotal victory for cryptocurrency firms that faced banking restrictions under the controversial policy. This regulatory shift removes a subjective assessment...

BTFS Protocol v4.0 Beta Launches with Major Upgrades

The BitTorrent File System (BTFS) has officially launched its v4.0 Beta, marking a significant milestone in decentralized storage technology. This upgrade introduces enhanced network performance and resource allocation optimizations, positioning BTFS as a stronger...

GnosisDAO Explores RWA Integration via DoDAO Proposal

GnosisDAO is considering a new proposal from DoDAO to integrate Real-World Assets (RWAs) onto its blockchain infrastructure, signaling a strategic expansion into tokenized traditional assets. This initiative aligns with GnosisDAO's recent $40 million venture fund...

Texas Launches $10M Bitcoin Reserve with Public Funds

Texas has become the first U.S. state to establish a publicly funded Bitcoin reserve after Governor Greg Abbott signed Senate Bill 21 into law. The legislation authorizes an initial $10 million purchase of Bitcoin (BTC) for the newly created Texas Strategic Bitcoin...

Midnight Unveils NIGHT Tokenomics and Glacier Drop Airdrop

Midnight Network, a privacy-focused sidechain within the Cardano ecosystem, has unveiled comprehensive tokenomics for its native NIGHT token alongside details of its unprecedented "Glacier Drop" airdrop. The distribution targets 37 million wallets across eight major...

Trump Media Approves $400M Stock Buyback, Bitcoin Strategy Intact

Trump Media and Technology Group (DJT) has authorized a $400 million stock repurchase program while maintaining its $2.3 billion Bitcoin treasury strategy. The board-approved buyback will be funded separately from the company's cryptocurrency reserves, signaling...

R0AR Token Debuts on BitMart Exchange

R0AR, an emerging DeFi platform, has achieved a significant milestone with the listing of its native token $1R0R on centralized exchange BitMart. This marks the token's first CEX listing since its inception, expanding accessibility beyond decentralized platforms. The...

Latest Market Insights

What’s the Difference Between a Cold Wallet and a Crypto Exchange?

Cryptocurrency is becoming more mainstream every year, but when it comes to storing your digital assets, there’s still confusion between two of the most common options: crypto exchanges and cold wallets. If you’ve ever wondered which is right for you, this guide...

Top 5 Altcoins to Stake in 2025 (Medium–High Risk, High Rewards)

Staking cryptocurrencies can be a lucrative way to earn passive income, especially with altcoins that offer higher yields than the likes of Ethereum. However, higher staking rewards often come with increased risk and volatility, so they suit investors with a medium to...

Top 10 Stablecoins of 2025: An In-Depth Report

Stablecoins have become a cornerstone of the crypto ecosystem, providing a refuge from volatility by pegging their value to stable assets (usually fiat currencies like USD). The total stablecoin market has exploded in size – rising from about $20 billion in 2020 to...

Crypto Token Launches in June 2025

June 2025 is set to be a bustling month for new crypto token launches. A diverse array of projects – spanning decentralized finance (DeFi), gaming and metaverse platforms, real-world asset tokenization, AI-driven services, and even wearable technology – are all...

Quantum Computers vs Cryptocurrencies: What is the Risk?

Quantum computers represent a fundamentally different computing paradigm compared to classical computers, leveraging principles like superposition and entanglement through the use of qubits. Unlike classical bits that are either 0 or 1, qubits can exist in multiple...

Bitcoin Dominance Soars: When Does Altseason Begin?

Bitcoin’s market dominance – the percentage of total crypto market capitalization held by Bitcoin – has been on a steep rise, reaching levels not seen in years. As of early 2025, Bitcoin accounts for well over 60% of the entire cryptocurrency market’s value, a...

AI Tokens in 2025: In-depth Report

This report provides an investment-focused analysis of 10 notable AI tokens as of 2025. We will examine their performance trends, market capitalizations, adoption levels, and real-world use cases, and discuss current investment sentiment and future outlook based on...

Table of contents

Install Coin Push QR Code
Coin Push Crypto Signals

Get live crypto breakout alerts

Install Coin Push - Stay ahead!

Scan this code or visit coinpush.app on your phone