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3 cryptocurrencies to avoid trading next week

3 cryptocurrencies to avoid trading next week

The cryptocurrency market is highly affected by news, technical developments, and economic factors, which can occasionally bring uncertainties to projects. In particular, Finbold identified three of the most popular cryptocurrencies to avoid trading next week, considering atypical risks.

At some specific times, not trading specific assets under elevated fear, uncertainty, and doubt (FUD) may pose the most profitable decision, weighted by the opportunity cost of missing solid price action.

Essentially, cryptocurrency traders profit by following thoughtful strategies based on probability and by properly managing their risks. When the outcome is uncertain, observing is part of a solid risk management strategy, waiting for further insights and developments.

For that reason, Finbold selected the following three cryptocurrencies among the most valuable projects to avoid trading next week.

Solana (SOL)

First, Solana (SOL) – the supposedly highly efficient layer-1 blockchain and Ethereum’s (ETH) most popular competitor.

The Solana network is going through continued congestion issues with an increased rate of failed transactions. Notably, over half of all transactions received by Solana’s validators fail to reach a consensus and, therefore, finality.

As of writing, on April 12, the transaction failure rate is 52.6%, according to a Dune Analytics dashboard by scarn_eth. This level has been sustained for over a month and previously reached rates above 75%.

Solana Failed Non-Vote Transaction Rate and Share. Source: Dune Analytics/scarn_eth

Despite that, SOL remains the 5th most valuable cryptocurrency, trading at $173, correlated to TradingView‘s total crypto market cap index. This suggests Solana traders have not yet priced the network’s poor conditions, drawing uncertainty for its future price action.

Solana (SOL) daily price chart vs. total cryptocap index. Source: TradingView/Finbold

Avoid trading XRP amid Ripple’s unusual activity

Second, speculators should avoid trading the XRP token next week, considering an unusual delay for Ripple‘s April sell-offs.

As reported by Finbold, Ripple unlocked 1 billion XRP on April 1. Later, the company sent 200 million tokens worth $120 million to its Treasury account, preparing for this month’s selling activity.

However, the ‘Ripple (1)‘ address has not made any payments by the time of reporting. This is unusual for a company that has consistently sold the first batch of tokens within the first 11 days of each month.

Historically, these sell-offs have anticipated XRP meaningful drops in price, as shown in the daily price chart year-to-date. The token now trades at $0.608, in a delicate balance phase, as a major price swing looms.

XRP daily price chart. Source: TradingView/Finbold

Uniswap (UNI) suffering regulatory pressure from the SEC

Finally, Uniswap (UNI), the largest decentralized exchange protocol by trading volume, now faces regulatory pressure from the United States Securities and Exchange Commission (SEC).

On that note, Haydenz Adams, creator of Uniswap, declared the company is willing to fight the SEC.

As a result, UNI suffered a massive hit this week. Uniswap’s governance token went from around $11.5 to $9.0, for 20% losses in four days.

Uniswap (UNI) daily price chart. Source: TradingView

All in all, cryptocurrency traders must be aware of network issues, economic activity, and regulatory news to navigate this market. Cryptocurrencies are inherently volatile, but external factors can potentialize the risks of assets that speculators should avoid trading.

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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