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Many cryptocurrencies surged for extraordinary gains in the last seven days. Market indicators suggest potential downturns and disparate price fluctuations for three particular cryptocurrencies that crypto traders should avoid buying next week.
Cryptocurrency markets demonstrate high volatility and operate in alternate trends. Therefore, investors must remain cautious with coins that have already accrued meaningful gains.
In this context, Finbold turned to the Relative Strength Index (RSI) heatmap on CoinGlass to identify digital assets that might be overbought or trading at a premium. We retrieved this data on October 27, looking to a 1-week time frame RSI.
Particularly, Injective Protocol (INJ), Bluzelle (BLZ), and Unifi Protocol DAO (UNFI) stand out as projects that should be avoided next week, according to elevated RSI points in the ‘Overbought’ heat zone.
Injective Protocol (INJ)
Interestingly, ChatGPT recommended Injective as a top buy on October 21, as reported by Finbold. This proved to be a profitable move, with INJ trading at $12.85 by press time for over 39% price gains in a week.
However, its Relative Strength Index now accumulates a massive 91.02 points in 24 hours and 73.05 points in seven days. Both indicate an overbought status for the Injective Protocol, which could cause a trend reversal for INJ in the following week.
Bluzelle (BLZ)
With an even higher weekly premium, there is BLZ, trading at $0.216 by the time of publication for 17.42% price gains in the period.
Bluzelle’s Relative Strength Index accumulated 77.55 points in seven days, suggesting it might be overbought and could pivot for a bearish trend. Nevertheless, the 24-hour RSI indicates strength with 66.29 points, despite also getting closer to the overbought status.
Unifi Protocol DAO (UNFI)
As the last of the three cryptocurrencies to avoid buying next week, we have Unifi DAO’s token. This governance token has the lowest overbought status among the mentioned assets but is still relevant due to its lowest market cap and liquidity.
UNFI is changing hands by $7.80 at the moment of writing, with 19.5% gains in a week for a weekly RSI of 71.5, also suggesting it is already overpriced in this time frame. Despite showing strength on both the 24-hour and 4-hour indexes, investors must remain cautious since this low-cap cryptocurrency is susceptible to high volatility.
It is important to note that for the goal of this report, Finbold is only considering one single technical analysis indicator. Other pieces of information must be considered in order to make thoughtful financial decisions, as ‘overbought’ assets could continue in a bullish trend for longer if demand continues to increase.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.