Nexo (NEXO) and Quant (QNT) Are Overbought and Risky Bets for Traders

The cryptocurrency market is in a consolidation phase, but several digital currencies are witnessing increased buying pressure

The cryptocurrency market is currently in a consolidation phase, but several digital currencies are experiencing increased buying pressure, pushing them into the overbought zone. This influx of buying activity is heating up the market, potentially setting the stage for a crash in the coming week.

To measure the magnitude of price movements, traders often employ technical indicators, such as the Relative Strength Index (RSI). RSI values typically range from 0 to 100, with units measured over varying time periods, such as 14 days or 12 hours.

Generally, an RSI reading above 70 signals an overbought condition, while a reading below 30 indicates an oversold condition. However, it’s important to note that these thresholds can vary depending on the time frame and the specific trading strategy being used.

As several cryptocurrencies are now showing RSI values above 70, it appears that the market is quickly approaching a turning point, which could lead to a reversal in the price trends.

Nexo (NEXO)

Crypto lending entity Nexo is being closely watched by traders as it continues to feel the heat following the announcement of its re-entry into the U.S. market. The move was credited by co-founder Antoni Trenchev to a more favorable regulatory environment under the Donald Trump presidency.

However, NEXO’s price action raises concerns, signaling an imminent downturn.

Currently trading at $1.27, the token has seen a 1.60% increase over the past 24 hours. More telling are its RSI values with a reading of 71.98 on the 24-hour chart, 69.31 on the 12-hour chart, and 58.26 on the 4-hour chart.

Generally, an RSI above 70 indicates an overbought condition, which occurs when the rate of price increases is unusually rapid, potentially signaling an upcoming correction.

Nexo exited the U.S. in 2022 following regulatory challenges related to its Earn Interest Product, compounded by the FTX collapse and a broader crackdown on crypto lenders.

Quant (QNT)

Another cryptocurrency flashing warning signs for traders is Quant, a blockchain interoperability project. Priced at $86.70 as of press time, QNT has posted modest gains of 1.40% over the past 24 hours.

However, its RSI readings are concerning, with figures at 70.99 on the 24-hour chart, 73.64 on the 12-hour, and 69.03 on the 4-hour. These elevated RSI levels, particularly the 12-hour RSI above 70, potentially signal a forthcoming price dip.

While the technical indicators suggest that the highlighted digital assets might crash, their next price trajectory depends heavily on broader market sentiment. For instance, if Bitcoin (BTC) breaks past the $95,000 mark, there’s a good chance both NEXO and QNT will follow suit.