Cryptocurrency trading has its thrills but is equally fraught with peril. Investors are often caught in the whirlwind of volatility, swinging between lucrative profits and hazardous losses.
In this high-stakes arena, strategic discernment about which digital currencies to avoid can be the linchpin separating financial success from ruin.
Ahead of the forthcoming week, market analysts at Finbold meticulously examined indicators to pinpoint three cryptocurrencies that might spell disaster for traders.
Fueled by both fundamental economic analysis and insights from the Relative Strength Index (RSI), these tokens have raised red flags, hinting at amplified risks in the days ahead.
dYdX (DYDX): An Impending Token Unlock Spells Trouble
The native token of dYdX, DYDX, emerges as the first crypto to steer clear of next week, primarily due to imminent fundamental economic factors.
A colossal token unlock, slated from November 24 to December 1, threatens to flood the market with 152.16 million DYDX tokens, representing a staggering 84.41% of its circulating supply.
This deluge of supply could trigger a massive sell-off, potentially wreaking havoc on the token’s performance.
DYDX is priced at $3.24, marking a 1.4% surge over the past 24 hours, as per token.unlocks data.
Sei Network (SEI): The Overbought Enigma
Upon scrutinizing the RSI, Sei Network (SEI) emerges as one of the most "overbought" cryptocurrencies to avoid trading in the upcoming week.
Data gleaned from CoinGlass’s Relative Strength Index heatmap paints a concerning picture. The native token of this layer-1 blockchain platform, launched in 2023, showcases RSI indicators of 77.62 points in the 4-hour chart and 79.23 points in the daily timeframe.
Currently priced at $0.2368, SEI has seen a notable 17.58% surge in the last 24 hours.
Gas (GAS): Overbought Signals and Fundamental Dependency
Gas (GAS) mirrors SEI’s overbought signals, exhibiting a 79.83 RSI in the daily chart. Yet, its 4-hour RSI displays strength and hints at some momentum, which is particularly important for short-term price action in day trading scenarios.
Serving as the token for NEO Blockchain transaction gas fees, GAS’s fundamental success is intricately entwined with NEO’s adoption. At the time of publication, 1 GAS is valued at $8.93, witnessing daily losses of 1.75%.
Risk Management in Crypto Trading: Navigating Uncertainty
Cryptocurrency remains unpredictable, demanding utmost caution and astute analysis. According to the current data and comprehensive analysis, the aforementioned three cryptocurrencies raise alarm bells and present amplified risks in the week ahead.
As investors brace themselves for the tempestuous crypto market, a prudent approach involves avoiding these volatile assets exhibiting overbought signals. Keeping a keen eye on signals, market dynamics, and fundamental factors will be vital in navigating these treacherous waters.
The dynamics of digital assets underscores the criticality of informed decision-making in steering clear of potential pitfalls. Amidst the allure of soaring profits, the prudent move might just be to exercise caution and sidestep these crypto coins not to buy, foreseeing their potential fall while considering alternative coins that will rise in value.