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3 cryptocurrencies to avoid trading next week

3 cryptocurrencies to avoid trading next week

In the volatile world of cryptocurrency trading, savvy investors know how to avoid unnecessary risk exposure to cryptocurrencies. For example, the Relative Strength Index (RSI) signals potential overvaluation when it surges above 70, marking assets as overbought.

Notably, three cryptocurrencies flash warning signs with their high RSI readings. In this context, traders must exercise caution and apply stringent risk management strategies.

Identifying which projects to avoid trading is as important as knowing where to invest. Our upcoming analysis delves into three tokens with particularly higher risks considering the aforementioned index.

BNB Chain (BNB) is potentially overvalued

First, there is BNB Chain (BNB), with a $48.24 billion market cap, trading at $319.81 per token by press time. The network’s native token is down 3.92% daily, holding an above-average 4-hour RSI of 62.56.

However, its 24-hour and 1-week Relative Strength Index mark 79.07 and 82.94, respectively. This data from CoinGlass on December 29 suggests BNB is overbought and increases the risk of trading Binance’s token.

Crypto Market RSI Heatmap: BNB. Source: CoinGlass

Avoid trading Astar (ASTR) and Skale (SKL) next week

Astar (ASTR) and Skale (SKL) are the two other cryptocurrencies to avoid trading next week. Interestingly, the former has a higher 24-hour RSI of 78.06, trading at $0.12721 at the time of publication, down 0.92%.

Crypto Market RSI Heatmap: ASTR. Source: CoinGlass

However, Skale (the latter) marks the higher 1-week RSI of 92.38 — trading at $0.07887 and down 9.22% intra-day. Both cryptocurrencies set an overbought status in the larger time frame and an above-average strength in the short term.

Crypto Market RSI Heatmap: SKL. Source: CoinGlass

Nevertheless, having an overbought status does not guarantee poor future performance. It is possible that these crypto-assets continue to surge in price despite the signals.

All things considered, avoiding trading the three mentioned cryptocurrencies is from a more conservative risk management strategy, avoiding unnecessary exposure. Traders must do their own research and understand how everything might impact their operations.

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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