Investing and trading in the volatile world of cryptocurrency trading is quite risky. That’s why savvy investors know how to avoid unnecessary risk exposure to cryptocurrencies. For example, when the Relative Strength Index (RSI) rises above 70, it indicates potential overvaluation. That is, it indicates that the relevant assets are in an overbought condition. Crypto expert Vinicius Barbosa looks at 3 altcoin projects that investors and traders should stay away from next week.
These 3 altcoins are overheated, they may burn!
Three altcoins in particular are showing warning signs with high RSI values. In this context, investors should be careful and implement strict risk management strategies. Determining which projects to avoid investing in is as important as knowing where to invest. We look specifically at three tokens with higher risk, considering the RSI index.
Binance Coin (BNB) is potentially overvalued
First, there is BNB, which is trading at $319.81 at the time of writing. The altcoin currently has a market value of $48.24 billion. BNB, the native token of the network, is in the red zone on the daily chart. However, it has an above average 4-hour RSI at 62.56. However, the 24-hour and 1-week Relative Strength Index are pointing at 79.07 and 82.94 respectively. This data from CoinGlass dated December 29 shows that BNB is overbought. This increases BNB trading risk.
2 altcoins to stay away from this week: Astar (ASTR) and Skale (SKL)
Astar (ASTR) and Skale (SKL) are two other cryptocurrencies to avoid trading next week. Interestingly, ASTR has a higher 24-hour RSI of 78.06. The token is trading at $0.12721 at the time of writing.
However, Scale (second) points to a higher 1-week RSI value of 92.38. The altcoin was trading at $0.07887 at the time of writing. Moreover, it fell 7% on the day. Both cryptocurrencies are overbought on a broader timeframe.
However, having an overbought situation does not guarantee future poor performance. It is possible that the prices of these crypto assets will continue to increase despite the signals. All things considered, avoiding trading the three mentioned altcoins is a more conservative risk management strategy by avoiding unnecessary exposure. Investors need to do their own research and understand how everything will impact their operations.
The opinions and predictions in the article belong to the expert and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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