The cryptocurrency market has reached a value of $1.65 trillion, marking the highest level in the past 18 months. This surge has led to significant jumps in several altcoins, pushing some into the overbought territory. Three such altcoins have been advised to be approached with caution for a while.
Amid the current bull run, the crypto market’s value has increased by over 115% since January. The last time the market was at these levels was in May 2022. The rise in market value has been driven by substantial gains in Bitcoin (BTC) and various altcoins, with some experiencing four-digit growth percentages.
The significant rally in the overall market has led to overbought signals for some altcoins. Data from Coinglass’s Relative Strength Index (RSI) heatmap indicates three altcoins that are signaling potential corrections due to their overbought status.
The RSI metric is particularly alarming for Oasis Network (ROSE), BakeryToken (BAKE), and Injective (INJ). ROSE has seen a 22.46% increase in the last 24 hours, trading at $0.1229, with its RSI indicating overbought conditions across 4-hour, 24-hour, and weekly time frames.
BAKE, a decentralized exchange token, is also signaling overbought conditions, suggesting that investors should stay away until it exits the overbought level. Its RSI is currently at 73.38, 76.41, and 82.19 for the 4-hour, 24-hour, and weekly time frames, respectively.
INJ’s RSI is also showing extreme overbought signals, particularly on the weekly time frame, where it stands at 97.33. However, its 4-hour RSI is below the market average, at 52.3. This short-term neutral RSI amidst high mid-term overbought conditions could indicate a potential pullback for INJ, and investors may benefit from waiting for a new directional trend to establish.
While a normal correction is common in an excessively expanded bullish trend for altcoins, there are instances where the rise continues despite overbought signals, indicating increased risk rather than a simple deviation.
