We have witnessed weeks of massive volatility in the crypto market. Following this, some crypto assets faced significant imbalances that could cause drastic changes. Crypto analyst Vinicius Barbosa has identified two altcoins as overbought. The analyst says this is a possible sell signal in the tokens.
CoinGlass data gives an overbought signal for 2 altcoins!
We usually identify an overbought signal through a technical indicator we call the Relative Strength Index (RSI). RSI measures the momentum of the underlying asset based on past price movement, taking into account multiple factors. Strong momentum is generally positive above 60 index points. This indicates an uptrend or bull market. However, a move towards extreme strength can often signal that the cryptocurrency is about to undergo a correction or trend reversal. CoinGlass RSI heatmap gives overbought signals for 2 altcoins.
Overbought Reserve Rights (RSR) is likely to collapse soon!
Reserve Rights (RSR) is an ERC-20 token for the Reserve Protocol. The altcoin project currently has over $500 million in capital. The token is trading at $0.01 at the time of writing, up 12.88% on the day. It is noteworthy that RSR is overbought with RSI points of 73.48 and 88.78 on the daily and weekly time frames, respectively. This poses a major correction threat for the ERC-20 token, which has one of the highest weekly Relative Strength Indexes as of today and is considered overbought.
The altcoin giving the second-ranked shot signal: Dusk (DUSK)
Dusk (DUSK) has a similar weekly and daily RSI to the Reserve Rights token. With overbought status at 76.35 and 88.16 respectively, investors should be aware of a sell signal for DUSK. The token belongs to a layer-1 blockchain founded in 2018 and focused on real-world asset (RWA) compliance for institutional investors.
Interestingly, DUSK rose over 9.82% on the day. This comes with several weeks of positive price action. BlackRock’s recent move towards a tokenization fund and RWA initiatives has increased demand for this project, which may now face a short-term pullback. However, positive developments in the institutional environment will support further growth for Dusk, invalidating this technical analysis.
In conclusion, RSI data for RSR and DUSK shows a sell signal for these two altcoins that were overbought in April. However, it is possible that fundamentals will influence the continuation of the uptrend. Therefore, it would be beneficial for investors to trade cautiously in both scenarios.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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