Altcoins have been grabbing the attention of investors as they offer alternative investment opportunities beyond the dominant cryptocurrency, Bitcoin. Santiment, an analytics firm, recently highlighted the altcoins that are displaying bullish and bearish divergences. By analyzing the Relative Strength Index (RSI), Santiment determined the overvalued and undervalued conditions of several altcoins. This article will delve into the significance of RSI and discuss the specific altcoins experiencing these trends.
The RSI is a momentum metric used in technical analysis to track the speed and magnitude of recent price changes in an asset. While the RSI can be measured over any period, the 1-day RSI is particularly relevant in this analysis. A high value on the RSI indicates an overheated market and may suggest the asset is at risk of reaching its peak. Conversely, an RSI value of 30 or lower implies that the price is currently below its fair value and could potentially indicate an upcoming reversal to the upside.
Santiment’s chart reveals that Maker (MKR), Venus (vBNB), and Sei (SEI) have all shown high levels of RSI recently. With respective values of 74.6, 72.4, and 75, these altcoins are in the danger zone associated with an overheated market. Maker has experienced a significant rally, witnessing gains of over 30% in the past couple of weeks. However, considering the RSI, this strong run may soon come to an end.
On the other hand, altcoins like Elrond (ELGD), Arweave (AR), and Bonk (BONK) exhibit low levels of 1-day RSI. ELGD and AR stand in the underpriced zone, with RSI values of 22.6 and 29, respectively. Bonk, a Solana-based memecoin, hovers just above that range, with an RSI value of 31. These altcoins have also separated from the rest of the market, indicating the potential formation of bearish divergences. However, coins like Bonk, exhibiting a bullish divergence, may experience a price rise to catch up with other altcoins. Similarly, MKR and others may undergo a correction to align with the market.
During the past few weeks, Bonk has had a challenging time with its price following a downward trajectory. However, there seems to be a glimmer of hope as the price of Bonk skyrocketed by over 22% in the past 24 hours. This sudden surge suggests a potential turnaround for the coin, providing a positive outlook for Bonk holders.
Analyzing the RSI of altcoins offers valuable insights into their market conditions. Santiment’s examination of the altcoin market identifies both bullish and bearish divergences, highlighting potential investment opportunities. It is important for investors to conduct thorough research and due diligence before making any investment decisions. Altcoin markets can be unpredictable, and investing carries inherent risks. Use the information provided in this article at your own risk.
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