OKB crypto price continued its strong surge today, Aug. 21, making it one of the top gainers in the crypto industry. It went vertical, reaching a high of $242, much higher than this month’s low of $43. This article explains why the OKB crypto price is due for a huge crash.
OKB Crypto Price Has Become Highly Overbought
The first main reason why the OKB price could be on the cusp of a big crash is that it has become highly overbought. The daily chart below shows that the Relative Strength Index (RSI) jumped to a high of 93, the highest it has been this year.
More oscillators, like the Stochastic and MACD, have also moved to extreme levels. In most cases, cryptocurrencies and other assets often crash when they become highly overbought.
Mean Reversion to Trigger a Plunge
The other reason why the OKB price is ripe for a crash is known as mean reversion. This is a common concept that states that an asset will often remain inside its historical averages.
In this case, OKB crypto price has surged to $213, while the 50-day moving average is at $73 and the 100-day MA is at $62. This means that the coin will likel plunge and possibly move to these historical averages. A drop below is highly likely.
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Wyckoff Theory Hints at OKX Token Plunge
Additionally, there is a concept known as the Wyckoff Theory that explains how assets move over time. This theory identifies four main stages, including accumulation, markup, distribution, and markdown.
OKB crypto price remained in the accumulation phase for more than a year. This period was characterized by sideways price movements and low volume.
The OKB token burn news was the spark it needed to push it to the markup phase, where it remains. This phase is characterized by strong demand among investors and volume.
Indeed, data shows that the 24-hour volume jumped to over $12 billion, a significant figure for a token valued at $3 billion.
The next stage will be distribution, followed by markdown, where an asset declines. The OKB price is approaching a stage that may trigger the next phase of selling.
The Bottom Line
OKB crypto price has surged in the past few days after it announced a huge burn that reduced tokens in circulation to 21 million. This token burn triggered FOMO and a strong rally. As explained, there are high chances that the token will crash by double digits when this phase ends.
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