Ether (ETH), Ethereum’s native token, entered the “oversold territory” for the first time since November 2018 on June 12, 2022. Its relative strength index (RSI) reading fell below 30. This could be seen as an opportunity to buy the dip, as an oversold signal would lead to a trend reversal.
Analysts say the latest RSI dip raises the possibility of Ether undergoing a similar upside retracement in the future. Ethereum’s price remains bearish despite the success of the Ropsten testnet. Analysts predict a further price decline. At the time of writing this article, ETH was trading at $1,380. It has been down by 6% in the last 24-hours. The Ethereum price is currently below the 50-day Exponential Moving Average (EMA). An extended upside move toward the 50-week EMA above $2,700, up about 100% from June 12. It could also resume a downtrend with $1,120 as the next target. This level coincides with Ether’s 0.782 Fib line.
Ether’s price dived by more than 20% in the last six days. Most losses were recorded after June 10 when the US Labor Department reported that inflation reached 8.6% in May. This was the highest since December 1981. Furthermore, the higher consumer price index has raised fears that it would force the Federal Reserve to hike interest rates more aggressively. This drastically hit the appetite for riskier assets, hurting stocks, and two top cryptocurrencies – Bitcoin and Ethereum.
Vince Prince, an independent analyst, says the latest ETH decline could extend until the price reaches $650. There is a classic bearish reversal pattern with an 85% success rate in meeting its profit target. An analyst with Glassnode predicts that Ether will crash further into 2022. He highlighted the ratio between Ethereum’s and the top three stablecoins market cap grew to 80% on June 11. It should be noted that most people borrow stablecoins by providing ETH as collateral. As such, the potential of the Ethereum network becoming less valuable than the stablecoins would make the debt’s value higher than the collateral itself.