Cryptocurrency markets are notoriously volatile, presenting both opportunities and significant risks for crypto traders. The ability to discern which cryptocurrencies to steer clear of, based on meticulous fundamental and technical analysis, can make the difference between profit and loss.
With tokenomics influencing supply dynamics, such as token unlocks potentially leading to increased inflation, and technical indicators like the Relative Strength Index (RSI) signaling overbought or oversold conditions, a strategic approach is essential.
As investors prepare for the next week, Finbold looked into leading indicators to list three cryptocurrencies that investors should avoid trading. Informed by both their underlying economic models and RSI signals, these coins may pose a higher risk in the coming days.
Picked for you
The native token of dYdX (DYDX) is the first cryptocurrency to avoid trading next week due to fundamental economic aspects. Notably, a massive token unlock starts on November 24 and continues until December 1.
During the next seven days, the dYdX team will unlock 152.16 million DYDX, accounting for 84.41% of its circulating supply. This unprecedented supply inflation could create a huge selling pressure that might drastically affect the token’s performance.
Meanwhile, DYDX is trading at $3.59, up 9% in the last 24 hours, according to token.unlocks.
Sei Network (SEI)
Interestingly, when looking at the RSI, Sei Network (SEI) features as one of the most “overbought” cryptocurrencies to avoid trading next week. Data is from CoinGlass’s Relative Strength Index heatmap.
The native token of this layer-1 blockchain launched in 2023 shows 77.62 points for its indicator in the 4-hour chart and 79.23 points in the daily time frame. In particular, SEI is trading with 17.58% gains in the last 24 hours at $0.2368 by press time.
Similarly to SEI, Gas (GAS) is also showing overbought signals with a 79.83 RSI in the daily chart. Nevertheless, its 4-hour RSI shows strength and a bit of momentum, which investors must consider for short-term price action with day trading.
GAS has demand as the token used to pay for NEO Blockchain transaction gas fees, and its fundamental success is directly dependent on NEO’s adoption. At the time of publication, 1 GAS is priced at $8.93, with daily losses of 1.75%.
While the cryptocurrency market is unpredictable, caution and strategic analysis are key. The three cryptocurrencies mentioned above, according to current data and analysis, pose higher risks in the coming week.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.