Aptos [APT]: At Overbought Highs, Here’s how Profit-Taking Might Affect you

According to CoinMarketCap data, Aptos [APT] has gained 92% in the previous week, making it the crypto asset with the highest gains in the last seven days. APT’s value increased by 56% during the intraday trading session on January 21 to trade above $12. This was a fourfold rise from its low point of $3 in December 2022.

APT was the asset with the highest gains in the last 24 hours, with a 10% increase in price.

While APT had been rising since the beginning of the year, the exponential rise in value in the previous 48 hours was due to the establishment of two new APT liquidity pools on Binance Liquid Swap on January 20.

Binance, the leading cryptocurrency exchange, announced the introduction of four new liquidity pools on January 20th, including APT/BTC, APT/USDT, HFT/BTC, and HFT/USDT.

APT was trading at $14.07 at the time of publication. As of this writing, the alt’s Relative Strength Index (RSI) was 91.98, indicating that it was severely overbought. Its Money Flow Index (MFI) was also at 89.56.

When an asset’s RSI or MFI is “very overbought,” it signifies that the asset’s recent price rises have been big and rapid, and the indicators are signalling that the asset is becoming overvalued. This indicates that the asset’s price may be destined for a correction, as many investors may seek to profit at these levels.

However, sellers may find it tough to regain control of the market in the meantime, as evidenced by APT’s Average Directional Index (ADX). The ADX line (yellow) oscillates between 0 and 100, with values more than 25 suggesting a strong trend and values less than 20 indicating a weak trend.

At press time, the alt’s ADX was 57, indicating that the market’s current bullish trend was strong.

Furthermore, the price of APT was extremely erratic at the time of writing and has been since January 9th. An examination of the asset’s Bollinger Bands (BB) found a significant difference between the indicator’s upper and lower bands.

This often indicates that an asset’s volatility is considerable and its price fluctuates dramatically. This may suggest that the asset is experiencing extreme volatility, making future price moves more difficult to forecast. As a result, extreme vigilance is suggested.