Bitcoin (BTC) continues trading in a 3-month price range, while Ethereum (ETH) has surged following ETF-approval news last week. While the cryptocurrency market decides its next move, Finbold spotted two likely overbought cryptocurrencies, which could suggest a profitable “sell.”
Notably, the overbought status surged in CoinGlass‘s 24-hour relative strength index (RSI) heatmap on May 29. As of this writing, the average daily RSI marks 54.84 points, indicating an overall neutral market.
Therefore, projects that distance too much from this average—either to overbought or oversold levels—are likely to correct back. This is the case with seven cryptocurrencies, of which two stand out, broadcasting a clearer sell signal for cryptocurrency traders.
Sell signal for a suddenly overbought Bounce Token (AUCTION)
First, Bounce Token (AUCTION) has suddenly surged from an oversold to overbought status in the 24-hour relative strength index. As Finbold registered from CoinGlass‘s heatmap, the token trades at $26.35, up 46.87% in the last 24 hours.
Moreover, AUCTION has a 91.76 hourly RSI, evidencing how overbought it is in the shorter time frame. The project’s 4-hour, 12-hour, and 24-hour RSIs show 89.14, 82.94, and 75.99, respectively.
However, the weekly time frame shows a weak momentum for the Bounce Token, at 35.62, challenging the short-term continuation.
Bounce aims to be a decentralized network for transparent auctions in Web3.
Crypto Market RSI 24-hour Heatmap: AUCTION. Source: CoinGlass
ConstitutionDAO (PEOPLE)
Another overbought cryptocurrency is the ConstitutionDAO token PEOPLE. As stated on CoinMarketCap‘s project page, the experiment has been dissolved, but the token continues to pump without clear fundamentals.
Interestingly, PEOPLE has seen this positive price action for a while, putting its weekly RSI at an overbought status. Recent gains have sent the discontinued token to $0.081, up 1.81% in the day and with an overbought 73.83, 3 points lower than its weekly indicator.
Crypto Market RSI 24-hour Heatmap: PEOPLE. Source: CoinGlass
However, having overbought RSI does not guarantee the cryptocurrency will experience a correction. It is important to understand that this status comes after a demonstration of strength and is often seen during bull markets for continued time frames. Traders must understand the underlying fundamentals of each token and make decisions accordingly.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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