Overbought Cryptocurrencies Hold Strong Momentum Despite Market Crash
Despite the recent crash in the crypto market, where over $230 billion was wiped out from cryptocurrencies in just 24 hours, there are still some assets that maintain an overbought status on the daily Relative Strength Index (RSI). The RSI serves as a powerful indicator of the marketโs current state and acts as a momentum thermometer. Although the average daily RSI of all cryptocurrencies has dropped to 44.25, which is on the edge between โneutralโ and โweakโ, there are a few tokens that remain in the โstrongโ zone with an overbought RSI above 70.
Sell Signal for an Overbought TraderJoe (JOE)
The native token of Avalancheโs leading decentralized exchange, TraderJoe (JOE), is one of those tokens that still maintains its overbought status on the daily time frame. JOEโs 24-hour RSI currently stands at 74.83, which is significantly higher than the marketโs average. Despite experiencing a drop of 5.83% and trading at $1.05, JOE shows signs of strength in the weekly chart with a 7-day RSI of 60.61. However, itโs important to note that JOE is primarily traded within the Avalanche ecosystem, which may cause price performance lags during market crashes.
Space ID (ID)
Another cryptocurrency that appears to be overbought is Space ID (ID), with a daily Relative Strength Index of 73.63. Interestingly, its 24-hour price action was even stronger than JOEโs, experiencing a loss of 3.7% and reaching a spot price of $1.55. Space ID is a protocol designed to create a name service network for domains exchange in Web3. It is a competitor to the popular Ethereum Name Service (ENS) and operates on the Ethereum (ETH) platform.
Despite these two cryptocurrencies showing an overbought RSI and suggesting a sell signal, they may surprise investors by outperforming the market and maintaining their strong momentum. Itโs important to remember that an overbought RSI does not guarantee an imminent price crash. Crypto traders should consider various factors and technical indicators when making financial decisions.
Hot Take: Overbought Cryptocurrencies Defy Market Crash
Although the crypto market experienced a significant crash, some cryptocurrencies have managed to hold their ground with overbought status on the daily Relative Strength Index (RSI). TraderJoe (JOE) and Space ID (ID) are two tokens that remain in the โstrongโ zone despite unfavorable price action. While this suggests a sell signal, itโs essential to consider other factors before making investment decisions. The crypto market is highly volatile, and traders should always conduct thorough research and analysis to make informed choices.
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