The cryptocurrency market has started moving again after a low-volume week, with most digital assets trading in a consolidation range. In this context, Finbold looked for sell signals in overbought cryptocurrencies.
Despite the overall consolidation, some projects have maintained a strong momentum, leading to an overbought status. If these projects face challenges or a trend shift, this could create a selling opportunity for the next few days.
Notably, the total crypto market cap evidences the recent surge, adding nearly $160 billion in value since January 23. It marks a 10.53% increase in cryptocurrency until February 8, by press time.
Sui Network (SUI) is overbought
In particular, Finbold spotted an overbought Sui Network (SUI) at CoinGlass’s weekly Relative Strength Index (RSI) heatmap on February 8.
The SUI token currently has the highest weekly RSI in the market, creating a relevant sell signal at these prices. As of writing, Sui is trading at $1.51, up 3.16% in seven days but with a 79.64 overbought RSI.
Moreover, it also shows weakness in all other time frames except for the daily RSI. This short-term weakness could suggest a trend reversal at any moment for the Sui Network digital asset.
Sell signal for Injective (INJ)
Another potentially overbought cryptocurrency is Injective (INJ). The token has a 72.25 weekly RSI, trading at $32.82 and up 1.44% by press time. Like SUI, Injective signals a trend reversal with its low time frame RSIs.
Interestingly, other cryptocurrencies have higher RSI points in the seven-day time frame. However, INJ has the highest divergence between its weekly status and the short-term indicators – all below the market’s average.
Understanding this extreme-strength indicator is vital for investors looking to sell signals.
On the other hand, having an overbought RSI does not guarantee a price crash or trend reversals. The cryptocurrency market is highly volatile, and projects usually respond aggressively to news and relevant events.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
Source: https://finbold.com/sell-signal-for-2-overbought-cryptocurrencies-this-week/