The Bitcoin price reversal from the $70,000 psychological level has renewed the selling momentum in the October market. Contrary to the historical trend of a bullish Q4, several altcoins are already hovering in the overbought zone, signaling that a broader market pullback could trigger a significant downturn. Thus, risk-averse traders may sell these assets in October to safeguard their capital.
Top 3 Altcoins to Sell Before a Market Pullback in October
October has brought significant volatility to the crypto market, and while some assets show promise for future growth, others appear overbought and could face potential pullbacks. Savvy traders can identify altcoins they should offload by analyzing key metrics like the MVRV (Market Value to Realized Value) ratio.
FTX (FTT)
The FTX token has traded sideways for over a year, with a slight downward trend in the daily chart. By press time, the FTT price had traded at $1.78 while maintaining a market cap of $584.1 million.
According to the Santiment data, the FTT’s 365-day MVRV ratio has surged to a positive region, currently settling around 32%. A high MVRV ratio often indicates the asset is overbought, and investors might begin to take profits.
FTT’s recent correction from $3.43 to $1.75 coincides with the MVRV ratio fall from 101% to 32%, accentuating the asset is still at risk of prolonged downfall.
Litecoin (LTC)
Contrary to other altcoins, the Litecoin price has recovered from $49.8 to $70— a 42% increase— within three months. However, the LTC price witnessed a renewed selling pressure at the $76 level, triggering an 8% pullback to trade at $70.6 while maintaining a market cap of $5.3 Billion.
In addition, the 30-day MVRV ratio has spiked to 24.8%, indicating that short-term traders are profitable. These speculative traders are often quick to book their profit, which could trigger a surge in volatility and selling pressure.
Aave (AAVE)
Amid the recent market correction, the AAVE price records a notable pullback from $165.8 to $141, registering a 14.8% loss. The bearish turnaround forms a fresh lower high, indicating a change in market sentiment from buying on dips to selling in rallies.
Furthermore, the 90-day MVRV has surged to 2.36%, indicating that investors who bought AAVE within the past three months are also profitable. This could increase selling pressure as these traders may opt to lock in profits, potentially contributing to a short-term price correction.
Conclusion:
While it may be tempting to buy top crypto in hopes of further gains, the MVRV ratios suggest that FTX, LTC, and AAVE are overbought and might be at risk of a correction.
Frequently Asked Questions (FAQs)
MVRV ratios measure whether an asset is overbought or undervalued. High MVRV ratios for FTX, LTC, and AAVE suggest these altcoins are overbought
Litecoin has seen a significant recovery, but the renewed selling pressure at the $76 level and a 30-day MVRV ratio of 24.8% indicate that short-term traders are likely to book profits soon
AAVE has dropped 14.8%, and its 90-day MVRV ratio has risen to 2.36%, suggesting that many investors are in profit.
Sahil Mahadik
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/why-you-should-sell-these-3-altcoins-in-october/
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