Key Points
- Williams Percent R is a momentum oscillator that measures where price is closing relative to its recent high to low range.
- Williams %R overbought oversold levels explained: readings above -20 are often treated as overbought, and readings below -80 are often treated as oversold.
- Overbought does not mean price must fall, and oversold does not mean price must bounce. These levels show stretched conditions, not guarantees.
- How to use Williams %R: use it as confirmation at key levels, or to spot when momentum is stretched inside a trend.
- Williams %R vs RSI difference: both are momentum oscillators, but Williams %R is range-based and inverted, while RSI measures gains versus losses.
- Williams %R divergence strategy crypto: divergence can warn that momentum is fading, but it needs price confirmation at levels to matter.
- If any terms feel unfamiliar, use the Crypto Glossary for quick definitions, then return to this lesson.
Quick Answer
Williams %R is a momentum oscillator that shows how close the current close is to the highest high over a lookback period. In crypto, Williams %R is often used to spot stretched momentum using two common thresholds: above -20 is considered overbought and below -80 is considered oversold. These levels do not predict reversals by themselves. The clean way to use Williams %R is to combine it with trend context and key support and resistance levels, using it as a confirmation tool rather than a standalone trigger. Divergence between price and Williams %R can also warn that momentum is weakening, but it requires price confirmation to be actionable.
Where This Lesson Fits
Lesson 37 introduced Chaikin Money Flow and showed how volume and closing strength can reveal buying and selling pressure. Lesson 38 adds Williams %R, a momentum tool that focuses on stretched conditions, helping you judge whether a move is extended or resetting.
This lesson is part of the Technical Analysis for Beginners series. For the full lesson map and all supporting guides, visit the Technical Analysis for Beginners Hub.
What Williams Percent R Measures
Williams %R answers one simple question.
How strong is the close relative to the recent range?
If price closes near the top of the range, Williams %R moves toward 0.
If price closes near the bottom of the range, Williams %R moves toward -100.
It is an inverted oscillator, which is why its scale looks different from RSI.
Williams R Overbought Oversold Levels Explained (-20 And -80)
These are the most common reference levels.
Williams %R levels are often read as:
- above -20… overbought, meaning price is closing near the top of its recent range
- below -80… oversold, meaning price is closing near the bottom of its recent range
That reaction can come from:
- strong trends pushing price to keep closing near the top of the range
- panic selling pushing closes toward the bottom of the range
- range markets where swings repeatedly travel from one edge to the other
Overbought and oversold do not mean “sell” or “buy”. They mean stretched.
How To Use Williams R In Crypto
Use it in two main ways.
1) Stretched Momentum Inside A Trend
In strong uptrends, Williams %R can sit in overbought for long periods.
That is not a failure. That is trend strength.
In downtrends, it can sit oversold for long periods.
So the better question is:
Is the market trending or ranging?
If it is trending, you use Williams %R to judge when momentum is stretched, then you wait for a reset and confirmation at levels.
2) Range Swings Between Extremes
Williams %R can be helpful in sideways markets where price swings between support and resistance.
Mark:
- Williams %R pressing oversold near support
- Williams %R pressing overbought near resistance
- price action confirming with rejection or reclaim behaviour at the level
If you ignore levels and only chase oscillator extremes, you will get chopped.
Williams R Divergence Strategy Crypto
Divergence is when price pushes further but the oscillator does not confirm.
Common divergence examples include:
- price makes a higher high, Williams %R makes a lower high
- price makes a lower low, Williams %R makes a higher low
Treat divergence as a warning, not a signal.
The next step is always confirmation:
- level break
- failed retest
- trendline break that is clean and widely respected
- shift in candle closes and follow-through
Without confirmation, divergence is just a chart decoration.
Williams R Vs RSI Difference
They often get used for the same task, but they measure momentum in different ways.
Williams %R vs RSI difference:
- Williams %R measures close position inside the recent range, on a 0 to -100 scale
- RSI measures the balance of gains versus losses, on a 0 to 100 scale
- Williams %R tends to react quickly to range behaviour
- RSI is often used for broader momentum regime reads and divergence
You do not need both on the chart unless each one changes your decision.
Common Traps To Avoid
- treating overbought as “must fall” and oversold as “must bounce”
- ignoring whether the market is trending or ranging
- trading oscillator extremes in the middle of a range instead of at levels
- forcing divergence calls on low timeframes with noisy swings
- stacking Williams %R with multiple other momentum tools, creating redundancy
If you keep it as confirmation, it stays sharp.
Mini FAQs
What is Williams %R in crypto?
It is a momentum oscillator that measures where price closes relative to its recent high to low range.
What do -20 and -80 mean on Williams %R?
Above -20 is often treated as overbought and below -80 as oversold, meaning price is closing near the top or bottom of the recent range.
How do you use Williams %R indicator?
Use it as confirmation at key levels and with trend context, not as a standalone buy or sell trigger.
What is Williams %R vs RSI difference?
Williams %R is range-based and inverted, while RSI measures gains versus losses. Both can show momentum and divergence, but they behave differently.
What is Williams %R divergence?
It is when price makes a new high or low but Williams %R fails to confirm, which can warn momentum is weakening.
Is Williams %R good for beginners?
Yes, if you treat it as a stretched-momentum confirmation tool and anchor it to support and resistance.
Next Lesson
In this lesson you learned what Williams %R measures, how to read the -20 and -80 levels properly, how to use Williams %R in trend and range conditions, and how divergence can warn when momentum is fading.
Next, Lesson 39 covers the Parabolic SAR, a trend-following tool that can help you track trend direction and trailing support and resistance behaviour.
You have now completed Lessons 26 to 38 of the Start Smart Technical Analysis series.
Before you move on, take Quiz 3 to lock in what you learned across this module, including VWAP, pivot points, multiple timeframe analysis, volume profile, advanced Fibonacci tools, trend reversal vs continuation, Ichimoku, ADX, OBV, indicator confluence, RVI, CMF, and Williams %R.
For the full lesson map and all supporting guides, visit the Technical Analysis for Beginners Hub.
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Momentum context… not magic.
Legal And Risk Notice
This content is for education and information only and should not be considered financial, legal, or tax advice. Crypto assets are volatile and high risk. You are responsible for your own research and decisions, and you should consider seeking independent professional advice where appropriate.
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