The RSI is a momentum oscillator indicator that is commonly used to detect overbought and oversold conditions. Welles Wilder, who created the indicator in 1978, believed that looking for divergences to help identify potential changes in trend was the most effective use of the RSI. For a double bottom, the second bottom should form at the same or slightly lower price level as the first, with the RSI higher at the second bottom than at the first. All of this indicates that the second low is being made with less momentum than the first.

The Relative Strength Index (RSI) is a momentum oscillator widely used in technical analysis to identify overbought or oversold conditions in a financial market. When bottoms form, indicating potential reversal points, the RSI behaves distinctively. As prices reach a bottom, the RSI often exhibits divergence, where it fails to confirm the new price low. This divergence suggests weakening bearish momentum and potential upward price movement.

Additionally, as a market bottoms out, the RSI may hover in the oversold region (typically below 30), reflecting the extreme selling pressure. However, traders should exercise caution, as the RSI alone may not guarantee a reversal. Confirmatory signals from other technical indicators and price action analysis are crucial for a comprehensive assessment. Understanding how the RSI behaves during bottom formations aids traders in identifying potential trend reversals and making informed decisions in dynamic financial markets.