Key Points:
Ethereum's "rarely oversold" Relative Strength Index (RSI), historically associated with major ETH price rebounds, indicates a potential price reversal in the short term.
Ethereum traders believe that the price must remain above the $3,800-$3,900 range to avoid further declines.
Traders expect a rebound in the short term as key price indicators have dropped to several months' lows.
Data from Cointelegraph Markets Pro and TradingView shows that the ETH/USD Relative Strength Index (RSI) is extremely "oversold."
In the past two weeks, Ethereum has dropped 20% from $4,800 to below $4,000, significantly impacting the short-term RSI.
The four-hour chart shows that the RSI fell from a local high of 82 on September 13 to a six-month low of 14.5 on Thursday.
Such a drastic decline is extremely rare, with ETH/USD transitioning from "overbought" to "oversold" in less than two weeks. The last time this indicator was so low was on April 7, when ETH/USD was trading at $1,400.
The Relative Strength Index (RSI) is used to measure trend strength, with observers focusing on three key levels: 30 as the "oversold" boundary, 50 as the midpoint, and 70 as the "overbought" threshold.
When prices break through these key levels, traders typically use this information to gauge future trends. During bull markets, Ethereum often remains in the "overbought" range for extended periods.
Crypto market commentator Coin Bureau stated on the X platform on Friday: "The extreme low in ETH RSI is a 'rare' signal in Ethereum's price movement."
With the latest pullback, traders quickly believe that Ethereum's price is likely to rebound due to the exhaustion of selling pressure.
Analyst Mickybull Crypto posted on the X platform, noting: "The RSI is in the range to trigger a bullish reversal, as it was in June, showing signs of a local bottom for Ethereum."
Furthermore, analyst Max Crypto stated: "The daily RSI for Ethereum is currently the most oversold since June 2025." He added:
$ETH DAILY RSI IS NOW THE MOST OVERSOLD SINCE JUNE 2025. LAST TIME ETH WAS THIS MUCH OVERSOLD, IT RALLIED 134% IN JUST 2 MONTHS. pic.twitter.com/UcKnSG4yF0
Cointelegraph reported that whales have recently bought large amounts of Ethereum at low prices, increasing the likelihood of a short-term price reversal.
Traders believe that bearish targets still exist, with several key ranges to watch above and below the current price.
Analyst Crypto Devil, using a pseudonym, noted on the X platform on Friday: "The previous two times ETH was extremely oversold on the 8-hour RSI marked the bottom."
Crypto Devil believes that altcoins need to hold above $3,900 to "retest the declining exponential moving average (EMA)" near $4,100.
A deeper correction could lead to a retest of the $3,600 support or a drop to the $3,000-$3,300 range.
Analyst Jelle stated: "ETH price needs to hold above the breakout point of the broadening formation at $3,800 to avoid an unsettling further pullback."
Cointelegraph reported that if it falls below $3,800, the price could further test the technical support level of $3,400—the lower boundary of the symmetrical triangle.
Related: Crypto Executives: Stablecoins Need Consumer Protection to Replace Existing Payment Giants
This article does not contain investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making decisions.
Original article: “Ethereum (ETH) Flashes Rare Oversold Signal Since $1.4K”
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