The cryptocurrency total market cap has reached 18-month highs at $1.65 trillion capitalization. Meanwhile, some cryptocurrencies are showing overbought signals and should be avoided trading next week.
Interestingly, this current bull market started in January 2023 with a 115% surge in the total market cap. Previously, TradingView’s index for total capitalization lost its current value 18 months ago, in May 2022, during the bear market.
In the meantime, Finbold retrieved data from CoinGlass’s Relative Strength Index (RSI) heatmap on December 22 to spot overbought cryptocurrencies. Cryptocurrency traders should avoid trading these projects next week as part of a solid risk management strategy.
Particularly, Oasis Network (ROSE), BakeryToken (BAKE), and Injective (INJ) offer extra risks for traders with current data.
Avoid trading Oasis Network (ROSE) next week
The Oasis Network native token, ROSE, is trading at $0.1229 by press time, up 22.46% in the day.
However, its RSI shows an overbought status in both the 4-hour, 24-hour, and 1-week time frames. Respectively, the index punctuates at 82.71, 77.31, and 95.56 for each time frame.
BakeryToken (BAKE)
Meanwhile, BAKE, a decentralized exchange token, shows a lower overbought status than ROSE, but it is still relevant enough to avoid trading the BakeryToken next week.
Essentially, BAKE has 73.38, 76.41, and 82.19 RSI in the 4-hour, 24-hour, and 1-week time frames, respectively. The token trades at $0.441 by press time, up 15.59% in the last 24 hours.
Injective (INJ) a cryptocurrency to avoid trading next week
As of writing, Injective was trading at $38.61, down 3% in the day, while presenting an interesting RSI divergence.
Notably, INJ’s weekly Relative Strength Index is the highest among other cryptocurrencies, at 97.33 points. However, the 4-hour RSI marks 52.3, smaller than the market’s average of 57.56 points.
This short-term neutral RSI amid one of the highest mid-term overbought statuses suggests a massive retracement is around the corner for INJ. Therefore, investors should avoid trading Injective for now until it consolidates a new trend.
Usually, cryptocurrencies in an overextended bullish trend are likely to retrace for usual market correction. Nevertheless, even overbought assets can continue to go up in price, which increases the risk of trading such tokens.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
