At some specific moments, the best decision a cryptocurrency trader can make is to avoid trading some cryptocurrencies. This is particularly true during key points of uncertainty and trend definition.
For example, speculators should avoid trading overbought or oversold cryptocurrencies without clear signals of trend reversals. Moreover, assets trading at key supports or resistances are good candidates to avoid until they break out or bounce back.
Knowing when to wait is vital to good risk management strategies, despite the usual ‘Fear of Missing Out’ (FOMO).
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Avoid trading Bitcoin (BTC) at the $52,000 resistance
First, Bitcoin (BTC) is a cryptocurrency to avoid trading in the current price zone. BTC is testing a key multi-year resistance at around $52,200. This zone acted as an important price support and resistance in 2021.
Following the uncertainty, Bitcoin has registered a low exchange volume since February 14, when it entered this tight range. Anything is possible now, and BTC could either retrace from the bull rally or continue trending upwards. The best move here is probably to wait for the definition of its further price action.
Arkham (ARKM) in an ‘overbought’ momentum
From another perspective, Arkham (ARKM) is trading with an overbought Relative Strength Index (RSI) in four different time frames. This is an indicator of extreme strength usually seen in bull markets.
However, being overbought usually precedes trend reversals if the cryptocurrency starts losing momentum in lower time frames. So far, ARKM is not showing trend reversal signals, but the RSI is high enough for a sudden correction.
Thus, investors should avoid trading Arkham at these prices of $0.82, up 23.16% in the last 24 hours.
Jupiter (JUP) in an ‘oversold’ momentum
On the other hand, Jupiter (JUP) presents an ‘oversold’ daily RSI of 29.94. JUP is down 0.29% while trading at $0.517 by press time.
Interestingly, Jupiter’s 4-hour RSI is neutral, suggesting a trend reversal and possibly a buy signal. Nevertheless, the team recently performed a massive airdrop of the token, which creates extra risks for JUP. Therefore, the suggestion is to avoid trading it with such a risk of sell-off continuation by early investors.
In this high speculation and uncertainty scenario, investors should avoid trading the three aforementioned cryptocurrencies and wait for further developments.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
