Relative Strength (Comparative)
A measure of how one asset's price performance compares to another benchmark asset over time, used to identify which asset is outperforming independent of the broader market's overall direction.
Comparative relative strength measures how one asset's price performance compares to a separate benchmark asset over a given period, commonly plotted as a ratio of the two prices over time, rising when the first asset outperforms the benchmark and falling when it underperforms. This differs from an indicator with a similar-sounding name, the Relative Strength Index (see Kaavon's "Relative Strength Index (RSI)" glossary definition), which measures a single asset's own internal momentum rather than comparing it to a separate benchmark at all.
Comparative relative strength is commonly used to identify which specific assets are outperforming or underperforming independent of the broader market's overall direction — for example, tracking an altcoin's price relative to Bitcoin specifically shows whether that altcoin is gaining or losing ground against Bitcoin, regardless of whether the entire crypto market is simultaneously rising or falling in dollar terms.
Examples
- An altcoin's comparative relative strength against Bitcoin can be rising even while both assets fall in dollar terms, as long as the altcoin is falling by less than Bitcoin is.
- Comparative relative strength and the Relative Strength Index share a similar name but measure entirely different things, one comparing two separate assets and the other measuring a single asset's own internal momentum.