This week two overbought cryptocurrencies receive sell signal
The current state of the cryptocurrency market is experiencing fluctuations, influenced by broader economic conditions. Recent data has revealed a surprising increase in U.S. job growth, exceeding expectations and indicating a strong economy that can handle higher interest rates. This reduces the likelihood of rate cuts, impacting the flow of money into riskier investments like cryptocurrencies.
Amidst this economic landscape, Finbold has identified two cryptocurrencies that are currently overbought, presenting a potential selling opportunity. Based on CoinGlass’s 24-hour relative strength index (RSI) heatmap on June 7, the average daily RSI is 54.70, suggesting a neutral market. However, cryptocurrencies deviating significantly from this average, either by being overbought or oversold, are likely to correct towards the mean.
Binance Coin (BNB) is currently priced at $700.30, with a slight drop of 0.39%. Its RSI values over various time frames indicate it is overbought, especially in the past 24 hours. With a 24-hour RSI of 75.56, above the overbought threshold of 70, there is strong buying pressure that may not be sustainable. The 1-week RSI of 82.52 suggests a prolonged overbought condition, potentially leading to a price correction.
ORDI, the first token minted using the BRC-20 standard, is priced at $62.888, reflecting an 8% increase. Its RSI values also indicate it is overbought, with a 24-hour RSI of 74.65. ORDI has surged nearly 17%, reaching its highest price since early April. This rapid increase, combined with high RSI values, suggests a possible price correction as the market stabilizes.
Both BNB and ORDI are showing high RSI levels, indicating they are overbought and may be ready for a price correction. However, it is essential to understand that an overbought RSI does not guarantee an immediate correction. It often follows a period of strong performance and can persist during prolonged bull markets. Therefore, traders should consider both technical indicators and the underlying fundamentals of each cryptocurrency before making investment decisions.
Disclaimer: The information provided should not be considered investment advice. Investing in cryptocurrencies is speculative, and there is a risk of losing capital.