According to Cointelegraph, Ethereum's market dominance has reached an unprecedented overbought RSI level not seen since May 2021, a situation historically associated with significant corrections. The ETH/USD four-hour chart shows bearish divergence, suggesting a potential price correction of 10-15%.
Despite short-term risks, some analysts believe that the pullback represents a 'buy on dips' opportunity, which could drive the price towards $3,500-$3,800. Ether has risen more than 50% from May to date, significantly outperforming the overall crypto market's 15.25% increase.
Ethereum's market share has recovered strongly, pushing its daily relative strength index (RSI) to the most overbought territory since May 2021, raising concerns among traders about a short-term pullback. Historically, extreme RSI levels in ETH.D have marked the beginning of significant corrections.
ETH.D has decreased by more than 17.5% in the past 315 days. The current RSI has exceeded 80 again, indicating that Ethereum's market share may be nearing a local top. ETH.D remains below its 200-day exponential moving average (EMA), a resistance level that has repeatedly constrained Ethereum's dominance.
The ETH/USD four-hour chart shows classic bearish divergence, with prices reaching new highs while momentum indicators are declining. Trader AlphaBTC points out that ETH shows 'three clear divergence drives,' which typically signal trend exhaustion. ETH is approaching the $2,740 Fibonacci extension, and profit-taking pressure may increase, with a short-term correction potentially targeting the $2,330 or $2,190 low Fibonacci levels.
Independent market analyst Michaël van de Poppe suggests that the decline in ETH could be a 'buying opportunity on dips,' and that the price will ultimately exceed $3,500. Trader Peter Brandt predicts that the price will 'moon shot' past $3,800.
