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 Shows the Limit
The RSI indicator on the daily chart has reached 89.5 — this is a historical extreme. RSI above 85 is not just an overbought zone; it’s a zone where the market is in a state of full saturation. Such levels are rare and almost always precede either a powerful surge or a correction.
The parabola combined with RSI 89.5 creates a classic dilemma: the trend may continue due to inertia and FOMO, or a quick pullback may begin. History shows that most often, at such RSI levels, profit-taking traders react first, triggering a chain reaction.
Three Strategies for Actions in Conditions of Maximum Volatility
Traders are divided into three camps in such situations:
Strategy 1: Aggressive Holding. Supporters of this approach believe that the RIVER parabola has not yet reached its peak, and RSI can rise even to 95. They rely on the strength of the trend and are ready to hold positions up to $100 and above. This approach requires nerves of steel and risk understanding.
Strategy 2: Full Profit Taking. Conservative traders see RSI 90 as a stop-signal. They take all available profit, knowing from experience: a parabola that rises so quickly often falls just as rapidly. They expect a correction of 30–50% and are ready to switch to waiting mode.
Strategy 3: Partial Profit Taking with Trailing Stop. A compromise option — take 50–70% of the profit, and let the remaining part ride the parabola using a trailing stop. This balances the desire to participate in potential growth with the need to protect earned gains.
The Golden Rule for Everyone: Define Your Strategy BEFORE Panic
When RSI exceeds 85, market psychological stress reaches its maximum. This is the moment when emotional decisions override logic. Traders who have pre-determined their exit plan — the size of fixed profits, stop levels, growth targets — have a significant advantage.
The RIVER parabola is at a critical point. It’s not just a technical formation — it’s a choice between risking missing out on growth and risking losing profits. The market demands respect for its volatility and a clear action plan.
In conclusion: Regardless of the chosen strategy, it’s important to remember — aggressive bulls and cautious professionals can both be right simultaneously. Parabolas often move higher than seems reasonable but also fall faster than expected. Your success depends on a combination of analysis, risk management, and emotional discipline.