The cryptocurrency market has recently gone through a tumultuous phase, leaving many investors uncertain. Amid this turmoil, most cryptocurrencies quickly shifted from overbought statuses to more neutral or even oversold positions according to their Relative Strength Index (RSI) readings.
However, some assets managed to buck the trend, securing significant gains while maintaining a high Relative Strength Index. Finbold identified this sell signal using the 24-hour RSI heatmap from CoinGlass‘s momentum indicator, considering that overbought cryptocurrencies are likely to retrace eventually.
Tellor (TRB): A steep ascent signals caution
Tellor (TRB), a blockchain-based oracle network and Chainlink (LINK) competitor, has exhibited an extraordinary price surge. From a low of $42.73 to a high of $141.72, TRB has seen an increase of nearly 200% in value over a week. This sharp rise has catapulted its 24-hour RSI to 79.88 and an even more pronounced four-hour RSI to 80.54, signaling an overbought scenario.
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Additionally, the significant price increase of 21.3% in the last 24 hours has pushed its current price to $132.66, far above its 30-day Exponential Moving Average (EMA) of $76.48.
Despite a more moderate weekly RSI of 60.35, the short-term indicators suggest that Tellor might be due for a price correction as traders could start taking profits, anticipating a pullback after such rapid gains.
Frontier (FRONT): Sustained overbought conditions
Frontier (FRONT), presents a similar picture, with its 24-hour RSI standing at 74.66, while the four-hour RSI slightly edges higher to 72.83. Even its hourly RSI level of 71.82 reflects sustained buying pressure that has not abated, leading to a 19.3% increase in its price over the last day, now valued at $1.529.
The week-long RSI at 58.35 shows a less intense but still elevated momentum compared to normal trading conditions, hinting that FRONT may also be approaching a peak.
This persistent overbought condition for both TRB and FRONT occurs against a backdrop of broader market declines and anxieties over future economic policies, including the Federal Reserve’s interest rate decisions.
While some investors might interpret high RSI values as a cue to secure profits by selling, others may view it as a testament to the cryptocurrencies’ resilience and potential for further gains. However, historical patterns and market analysis suggest that such overbought conditions are generally followed by price retracements.
As both TRB and FRONT have shown significant price increases in a short period, coupled with high RSI readings, cautious investors might consider this an optimal moment to reassess their positions and potentially take profits before a corrective phase sets in.
Investors are advised to keep a close watch on market signals and consider the broader economic indicators that might influence cryptocurrency prices.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
