Overbought altcoin projects are signaling a pullback in October. MVRV ratios point to profit-taking and increased selling pressure. Bitcoin price bouncing back from the psychological level of $70,000 renewed the selling momentum in the market in October. Contrary to the historical trend of a bullish Q4, several altcoins are hovering in overbought territory. This signals that a broader market pullback could trigger a significant decline. Therefore, risk-averse investors may sell these 3 altcoins in October to preserve their capital.
Top 3 Altcoin to Sell Before a Market Pullback in October:
FTX (FTT)
The FTX token has been flat for more than a year. There is a slight downtrend on the daily chart. Currently, the FTT price is trading at $1.78 while maintaining a market capitalization of $584.1 million. According to Santiment data, FTT’s 365-day MVRV ratio has jumped into positive territory. Thus, it is currently stabilized around 32%. A high MVRV ratio usually indicates that the asset is overbought and investors can start taking profits.
FTT’s decline from $3.43 to $1.75 coincides with a drop in the MVRV ratio from 101% to 32%. It also highlights that the asset is at risk of a prolonged decline.
Litecoin (LTC)
Unlike other altcoin projects, the Litecoin price went from $49.8 to $70 in three months. This represents an increase of 42%. However, the LTC price witnessed renewed selling pressure at the $76 level. Nevertheless, it maintained its market capitalization of $5.3 billion. It has now experienced an 8% retracement and is trading at $70.6.
In addition, the 30-day MVRV rate skyrocketed to 24.8%. This shows that short-term investors are profitable. These speculative investors usually take their profits immediately. Therefore, there will be price volatility and selling pressure.
The Last Altcoin on the List: Aave (AAVE)
In the midst of the recent market correction, the AAVE price recorded a significant retracement from $165.8 to $141, a loss of 14.8%. The bearish reversal creates a new lower high, signaling a shift in market sentiment from buying on dips to selling on rises.
Moreover, the 90-day MVRV skyrocketed to 2.36%, suggesting that investors who bought AAVE in the last three months are also profitable. This will increase selling pressure as these investors prefer to lock in profits, potentially contributing to a short-term price correction. While it may be tempting to buy top cryptocurrencies in the hope of further gains, MVRV ratios suggest that FTX, LTC and AAVE are overbought and could be at risk of a correction. As we at Kriptokoin.com have reported, altcoin markets are risky and investors are advised to do their own research.
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