The cryptocurrency market has been buoyed over the past few days, with Bitcoin reaching an all-time high and meme coins gaining prominence. altcoin The market faces the risk of a major sell-off after overbought.
While Bitcoin is heading towards a price correction after encountering historical resistance at $69,000, some other projects have lost momentum.
As we reported as Koinfinans.com, the Relative Strength Index (RSI) heat map according to CoinGlass offers interesting data. According to the data, many assets are in the “overbought” zone. Two of these show a potential sell signal in anticipation of a short-term pullback.
eCash (XEC)
Especially eCash (XEC) has the highest daily and weekly RSIs among other cryptocurrencies. According to data from CoinGlass, XEC is overbought in both time frames with index points of 89.36 and 79.27 respectively.
Interestingly, eCash was created as a direct fork from Bitcoin. Following BTC’s lead, it rose 53.57% in the last seven days to $0.00006892. A pullback is possible if Bitcoin continues its expected correction, which could drop as low as $50,000.
It is worth noting that eCash has a market cap of $1.34 billion at current prices. Hence, it has 19.65 trillion XEC as its circulating supply.
Dent (DENT) is also among the overheated altcoins
Secondly, Dent (DENT), a small-cap company with a market cap of $220 million, is also overbought. DENT’s daily RSI is 75.51 and its weekly RSI is 78.32, threatening to sell if momentum weakens.
Essentially, it is an ERC-20 token that runs on Ethereum (ETH) and was created for a digital mobile operator startup. DENT is trading at $0.002243 as of press time and its weekly gain is over 12%.
On the other hand, having an overbought RSI does not guarantee a price decline or trend reversal. The cryptocurrency market is highly volatile and projects respond aggressively to news and related events that are often heavily influenced by whale activity. Therefore, trading based on RSI values alone is risky and other market indicators and fundamental analysis factors should also be taken into consideration.
