Ethereum Dips into Oversold Region

Ethereum recently faced significant difficulty breaking the demand level of $3,356. Eventually, the bears enforced a bearish breakout, leading to an impulsive price crash to $2,890. This dip has played a crucial role in ensuring efficient price delivery, as the region of the fair value gap has been covered. The price has now tested the long-abandoned resistance border of the parallel channel on the daily chart, which is expected to provide support and pause the dip.

Ethereum Key Levels:

• Demand Levels: $2,890.0, $2,590.0, $2,292.0
• Supply Levels: $3,726.0, $4,085.0, $5,000.0

Indicators Analysis:

The Relative Strength Index (RSI) has been a reliable indicator for Ethereum. In May, when the price reached $3,726, the RSI swerved above 70, signaling an overbought condition. This preceded the subsequent price decline. Currently, the Moving Averages (Periods 9 and 21) are above the daily candles, highlighting the ongoing price decline.

However, the RSI has now entered the oversold region. Historically, this signals a potential reversal to the upside. As the fair value gap has been filled on the daily chart, a price recovery is anticipated.

Ethereum’s recent dip into the oversold region suggests that a reversal may be imminent. The price crash to $2,890 has filled the fair value gap, providing a basis for potential recovery. With the RSI indicating oversold conditions and key support levels in play, traders should monitor these signals for a potential bullish reversal.

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