RSI, or Relative Strength Index, is a widely used technical tool in the financial world. It is used to identify situations of overbought or oversold in prices, and fundamentally relies on the last closing price of an asset. The values of RSI range from 0 to 100 and this indicator measures the momentum, or speed, of the asset. The critical levels indicated by RSI are 30 and 70. Exceeding these levels typically signals a trend change.

So what does it mean? When the RSI rises above 70, it indicates that the price may have increased too much, and a correction may be on the horizon. Similarly, when the RSI falls below 30, it may suggest that the price could make an upward correction. However, the RSI does not always provide accurate signals. In some cases, discrepancies can be observed between price movements and RSI values.

Let me explain: Negative divergence occurs when the price closing is above the previous peak, yet the RSI remains at lower levels. This may be a sign that the price could be on a downward trend. Conversely, positive divergence is when the price makes a new low while the RSI stays high, which may indicate that prices could rise.

Although inconsistencies may indicate trend changes, it is not very safe to act alone. It should generally be evaluated together with other technical analysis tools and market conditions. For example, you can make more solid and reliable analyses by using different indicators or chart formations besides the RSI, thus making better investment decisions. It should be noted that RSI is a single indicator and cannot provide a fully independent buy-sell signal.