Technical indicators indicating that the crypto market is highly overbought

The crypto markets seem to have regained some stability at their current prices, with many altcoins having continued to climb, while Bitcoin is consolidating its base at just under $ 5,300. Analysts and traders have largely seen the recent upward movement of prices in the market. Many believe that the markets have found a foundation and that the persistent "Crypto Winter" has come to an end.

Despite the bullish buzz surrounding the markets, an empirically accurate technical indicator now indicates that cryptocurrencies are highly overbought, which could mean that a major backtrack is imminent.

Crypto markets continue to climb following recent rise

At the time of writing, the total market capitalization of cryptocurrencies was $ 182.8 billion, up from a daily low of $ 179.4 billion.

In recent weeks, the value of the markets has increased from $ 130 billion to one month to $ 186 billion. This rise was caused when Bitcoin began to rise, rising from the upper region at $ 3,000 to the lower region of $ 5,000.

Many cryptocurrencies were able to generate huge gains in the recent market rally, with Bitcoin Cash falling from its lowest monthly level to less than $ 130 to nearly $ 340. The Litecoin also recorded significant gains that dated back to the time of the parabolic race, rising from about $ 55 to highs of just under $ 100, before settling for its price current of just under 90 dollars.

These price increases have resulted in a significant volume of transactions, the volume of 24-hour transactions in the cryptography market has exploded from about $ 30 billion in early March to a peak of almost $ 90 billion at the beginning of March. beginning of April.

A technical indicator that causes problems for the markets

While recent gains have generated the confidence of many traders and badysts, the GTI Global Strength Indicator currently indicates that markets are highly overbought. It is also important to note that the last time this indicator reported that the markets were overbought, it was early January 2018, as markets had reached the peak of their parabolic rise.

Bloomberg, which for the first time reported that the GTI global force indicator was in a highly oversold territory, notes that this indicator follows the Bloomberg Galaxy crypto index, consisting mainly of Bitcoin, Ethereum and XRP, the three larger cryptocurrency.

Mike McGlone, an badyst at Bloomberg Intelligence, spoke about this technical indicator, explaining that the decline in market volume over the past week may partly explain the speed of the current encryption rally.

"A highly speculative market that is regaining its declining volume is not healthy. Generally, you need good volumes and solid transactions to indicate a sustainable trend. Bulls seem to be seizing ideas that suit them best, or what is best for their more emotional, less rational points of view. The emotional excitement of the past week seems too extreme, "he said.

As the week slips on the strength and resilience of the ongoing rally, investors and badysts in the cryptocurrency sector will become increasingly evident.

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