Alongside Bitcoin, the price of Ethereum was actually able to reclaim $3,000, rising faster than expected over the weekend. This translated into a daily increase of more than 6% on Sunday, as sentiment began to move towards the positive again. However, the move has not completely erased the bearish expectations surrounding the cryptocurrency, especially as one crypto analyst points out that the digital asset has now entered overbought levels.
Ethereum in dangerous territory
In an article by TradingView, crypto analyst SignalProvider highlighted that Ethereum has now entered overbought levels, which is bearish for the price. As the analyst explains, using the ETheruem-Hour time frame, the trend is currently bearish as the 7-period RSI shows that the digital asset is now at oversold levels.
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This comes as Ethereum price continues to trade above $3,100, which the analyst calls a strong horizontal structure. However, this structure did not hold as strong as expected, leading to market weakness. As a result, the crypto analyst explains that this could lead to a drop in prices.
If the decline plays out as expected with overbought levels, then the first target is $3,028, according to the analyst. This could then serve as a support level that could begin the next uptrend. However, this may not happen anytime soon, as prices enter overbought levels can take a while to play out.
ETH price not entirely bearish
While entering overbought levels remains a bearish signal for Ethereum price, another analyst outlined a possible bullish trajectory for the cryptocurrency from here. This lies in the bulls’ ability to completely break out from the $3,100 level.
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As crypto analyst TheSignalyst explains, the channel’s lower boundary served as support for Ethereum’s price above $3,000. If this channel continues to hold, then the uptrend remains intact. “From a structural perspective, ETH remains bullish, trading cleanly inside a flat ascending channel,” the post read.
Once the breakout is complete, the price could reach $3,600, which is the top of the current ascending channel. But TheSignalyst explains that until this breakout occurs, Ethereum investors should expect more sideways swings as the price continues to rise.
Featured image of Dall.E, chart by TradingView.com
