Bullish RSI Divergence in Ethereum Price: Potential Return to Growth Since 2018
Date: 2023-10-16 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, BUSINESS
The price of Ethereum (ETH) reached its lowest level since 2018, grabbing the attention of investors and traders. Let's explore the conclusions that can be drawn from this situation and its impact on the cryptocurrency's future.
Impressive Rebound after a Minimum: October 12, 2023, became the day when the price of Ethereum (ETH) reached its lowest level since 2018. This moment made investors contemplate and piqued the interest of those following the cryptocurrency market. The price drop reached a minimum of $1,521, marking the lowest value in the last 214 days.
Bullish RSI Divergence: One of the most intriguing aspects of this situation is the bullish divergence on the daily Relative Strength Index (RSI). Divergence occurs when a price decrease is accompanied by an increase in momentum, considered a bullish signal. This pattern emerged after RSI hit a minimum of 18 on August 18. What's particularly interesting is that the RSI minimum of 20 is the lowest since December 2018, indicating high oversold conditions, which often signal a possible price bottom. Even during the March 2020 crisis, RSI did not drop below this mark.
Past Experience: How rare is bullish RSI divergence in Ethereum's history? December 2018 is the only instance where the indicator formed a bullish divergence within the oversold territory. Interestingly, after this divergence, the price of Ethereum increased by 345%.
Predictions and Expectations: Based on the current RSI values and price dynamics, many experts see the continuation of a bullish trend as the most likely scenario. The descending parallel channel in which the price was trading is typically viewed as a corrective pattern, and its breakout could trigger bullish growth. If the bullish RSI divergence is confirmed, Ethereum's price could increase by 33% and reach a horizontal resistance area at $2,100.
But Don't Forget the Risks: Despite the optimistic forecasts, a bearish breakout from the channel would invalidate the bullish divergence and could lead to a 10% price drop, reaching the nearest support area at $1,400.
Overall, the Ethereum (ETH) situation has captured the attention of investors and traders, raising interesting questions about the future of this cryptocurrency. The cryptocurrency market always carries a high degree of uncertainty, and investors are vigilant about every new signal and indicator. We hope that the bullish RSI divergence indeed proves to be a strong growth signal for Ethereum, but, as always, it's essential to remember the potential risks.
