The cryptocurrency market began the week with a sharp correction as Bitcoin (BTC) and other majors pulled back on Monday, triggering widespread liquidations.
Despite the downturn, some tokens continue to flash overbought signals, a technical condition that often warns of short-term reversals.
Notably, an asset is typically considered overbought when its Relative Strength Index (RSI) rises above 70, signaling extended buying pressure.
While strong rallies can keep tokens elevated in this zone, the higher the RSI climbs, the greater the risk of consolidation or correction. Two assets currently flashing such signals are PAX Gold (PAXG) and Avalanche (AVAX).
PAX Gold (PAXG)
PAXG, a tokenized form of gold, is trading near $3,798.83 with a 1.74% gain in the past 24 hours. Its RSI readings show overheating across multiple timeframes: the one-hour at 76.76, four-hour at 86.32, the 12-hour at 78.85, and daily at 78.7, all well above the overbought threshold.
These levels suggest that while PAXG has benefited from safe-haven demand during market volatility, its upside momentum looks stretched.
Historically, such conditions often lead to short-term profit-taking, especially if gold prices stabilize or decline.
Avalanche (AVAX)
AVAX has surged to $34.72 after a 12% rally in the past 24 hours, bucking the broader market trend.
The move comes after several firms, including Bitwise and REX Shares, filed for Avalanche-linked exchange-traded funds (ETFs), covering both spot and strategy products.
Analysts describe the wave of applications as the “ETF floodgates opening,” with Bloomberg projecting a 90% approval chance for altcoin ETFs by late 2025.
The filings point to growing institutional validation for Avalanche and could attract fresh liquidity if approved. Still, momentum indicators suggest caution: the 12-hour RSI sits at 65.67, while the daily reading has crossed into overbought territory at 71.96.
Although Avalanche has gained from ecosystem developments and renewed institutional interest, rapid rallies often face profit-taking once RSI levels move past 70.
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