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 guide you through the steps to calculate the RSI for Bitcoin in Excel using historical price data.
What is the RSI?
The RSI is calculated as the ratio of how much a price has changed (from its 26-period moving average) to its recent price change compared to its previous period’s price change. A strong bearish or bullish trend will result in an oversold RSI reading, while a strong uptrend will result in an overbought RSI reading.
Step-by-Step Instructions
- Open Excel: Open the Excel spreadsheet where you want to calculate the RSI for Bitcoin.
- Set up columns: Set up two columns A and B in your Excel spreadsheet with the following headers: “Date” (Column A) and “Close Price” (Column B).
- Create a new column: Create a new column (let’s call it C) that will store the RSI values.
- Calculate the 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 Price” column (A).
- Calculate the recent price change: In Cell E2, enter the formula:
=(B2-D2)*100to calculate the recent price change.
- Calculate the RSI: In Cell F2, enter the formula:
=IF((E2/E1)>0.8,(F2/F1)+((F2-F1)/F1)5,(1-F2/F1))100to calculate the Relative Strength Index (RSI) for Bitcoin.
- 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 compute the RSI using historical price data, follow these steps:
- Set up a pivot table or use the “Rank” function in Excel to calculate the 26-period moving average.
Use the =A2/A2+0.92(B2-B1) formula to calculate the recent price change.
Use the =(B2-D2)100 formula to calculate the RSI.
Tips and Variations
You can use different moving averages, such as 50-period or 100-period, by changing the number in the formula (e.g., =A2/A2+0.85(B2-B1)).
You can use other formulas, such as =(B2-D2)100 or =(B2/B1)-((B2-B1)/B1), to calculate the RSI.
- You can also use Excel add-ins, such as the “Intricter” add-in, which provides more advanced technical analysis features.
Conclusion
Calculating the Relative Strength Index (RSI) for Bitcoin in Excel is a straightforward process that requires basic knowledge of Excel formulas and moving averages. By following these steps and using the provided formula or steps, you can accurately calculate the RSI for Bitcoin using historical price data.