The cryptocurrency market has resumed its bullish trend, led by Bitcoin (BTC), which is trading at a new record high above $110,000.
However, this optimism, driven by increased buying pressure from investors, has led to overbought conditions for specific cryptocurrencies, making them risky bets for traders heading into the weekend.
In this context, below are two overbought assets to hold off on trading, as they currently exhibit elevated Relative Strength Index (RSI) levels.
Bitcoin (BTC)
Bitcoin is trading at $110,975, surpassing its last record high. However, the asset’s RSI values across multiple timeframes suggest caution.
For example, the RSI reads 50.82 on the one-hour chart, 65.38 over four hours, 69.28 over 12 hours, and 74.53 over the past 24 hours.
Notably, an RSI above 70 typically indicates overbought conditions, and Bitcoin’s 24-hour RSI signals the potential for a pullback as buying pressure begins to ease.
It’s worth noting that Bitcoin rallied and broke above its all-time high of $109,588 on May 21, sustaining its bullish momentum and hitting another record price of $111,980 the following day.
Given the elevated RSI levels, if Bitcoin faces a retracement, the next key support level to watch is $105,000.
Nonetheless, Bitcoin continues to attract increased capital inflows as more investors view the asset as a potential hedge amid global economic uncertainty.
Worldcoin (WLD)
Worldcoin (WLD) has also experienced a significant rally, posting a massive 24-hour gain of 22%, bringing its price to $1.544. However, this sharp move has pushed its RSI into overbought territory, particularly on longer timeframes: 67.08 (1 hour), 76.06 (4 hours), 75.59 (12 hours), and 72.06 (24 hours).
The four-hour and 12-hour RSI readings above 70 suggest that Worldcoin’s momentum may be unsustainable in the short term, increasing the likelihood of a price correction.
Although WLD’s rally aligns with the broader market trend, it received an additional boost from the Worldcoin Foundation’s $135 million token sale, led by a16z and Bain Capital Crypto. The funds will expand Orb-verified World IDs and accelerate the rollout of Worldcoin’s identity network in major U.S. cities.
In summary, high RSI levels suggest potential pullbacks, but they don’t guarantee a correction. In strong uptrends, assets can stay overbought longer than expected, so investors should consider multiple indicators.
Featured image via Shutterstock
