Ethereum’s price has taken a major hit recently, falling below $2,000 for the first time since December 2023. This has further dampened already low investor confidence, leaving many wondering if the price will continue to fall or if we’re nearing a bottom.
A Look at the Monthly RSI
A key indicator, the monthly Relative Strength Index (RSI) on the CME Futures chart, has hit an all-time low. This is even lower than the readings seen during the 2022 bear market. Crypto analyst Tony “The Bull” Severino pointed this out, highlighting that while this suggests strong selling pressure, it could also signal a hidden bullish divergence.
Past Performance and Potential Future Trends
The last time the Ethereum RSI plummeted this low, the price eventually bottomed around $900 before starting a significant uptrend. This past behavior raises the possibility that Ethereum might be nearing a bottom, even with the current downward momentum. It’s possible we’ve seen the bottom around $1,900 and are on the verge of another price increase.
However, Severino cautions that the low RSI could also indicate extremely strong selling pressure, potentially driving the price even lower. Despite the possibility of a reversal, he currently leans towards a bearish outlook.
The Stochastic Indicator Adds to the Bearish Sentiment
Another indicator, the one-month Stochastic oscillator, has also fallen below 50, a level typically associated with bear market territory. Historically, Ethereum doesn’t usually bottom out until this indicator drops below 20, indicating extreme oversold conditions. Past trends show that when this happens, it often takes months for Ethereum to stabilize and recover.
At the time of writing, Ethereum is trading around $1,920, having recently dipped to $1,851. The situation remains uncertain, with both bullish and bearish possibilities on the table.
