True Strength Index Bitcoin Trading Analysis and TSI Bitcoin Trading Signals

TSI Bitcoin Indicator

Developed by William Blau

True Strength Index is a momentum indicator. The TSI is drawn by using a momentum calculation that reacts faster and is more responsive to btcusd price changes, making it a leading indicator that follows btcusd price action direction closely in the btcusd trading market.

The True Strength Index is drawn as a blue line, the indicator also plots a signal line which is drawn as a red line, and these two lines are used to generate crossover signals.

True Strength Index also plots a histogram which shows the difference between the TSI Line and the Signal line. This histogram crosses above or below the center lines, histogram levels above the center line shows a bullish crossover signal, while center line levels below the center line shows a bearish crossover signal.

Bitcoin Trading Analysis and Generating Bitcoin Trading Signals

The TSI uses various methods to generate cryptocurrency trading signals. This cryptocurrency indicator can be used in the same way as the RSI to determine general bitcoin trend direction of the btcusd trading markets. Overbought and oversold levels can also be shown using TSI. The most common methods of generating trading signals are:

Zero line Crossover (Histogram crossover not Lines crossover)

• Buy - when the histogram crosses above 0 a buy is generated
• Sell - when the histogram crosses below 0 a sell is generated

Signal line Crossover

• A buy is generated when the TSI line crosses above the Signal line
• A sell is generated when the TSI line crosses below the Signal line

This signal is the same as the one above and the timing corresponds to the time when the histogram crossovers happen.

Divergence Bitcoin Trading

Divergence is used to look for potential bitcoin trend reversal point of bitcoin crypto. The reversal divergence setups are:

Classic Divergence

Bitcoin Trading Classic Bullish Divergence: Lower lows in btcusd price and higher lows on the indicator

Bitcoin Trading Classic Bearish Divergence: Higher highs in btcusd price and lower highs on the indicator

Divergence trading can also be used in identifying potential bitcoin trend continuation points in btcusd price action direction. The continuation divergence trading setups are:

Hidden Divergence

Bitcoin Trading Hidden Bullish Divergence: higher lows in btcusd price and lower lows on the indicator

Bitcoin Trading Hidden Bearish Divergence: lower highs in btcusd price and higher highs on the indicator

Overbought/Oversold Levels

This can be used to identify overbought and oversold conditions in btcusd price action movements.

• Overbought condition - levels being greater than the +25 level
• Oversold condition - levels being less than the -25 level

Trades can be generated when the TSI crosses these levels.

Buy signal - when the levels cross above -25 level a buy is generated.

Sell signal - when the levels cross below +25 level a sell is generated.

Oversold

Overbought

The overbought/oversold levels are indicated using horizontal lines drawn at the +25 and -25 levels.