Ethereum Has Reached an ‘Oversold’ Level [Analysis on Ethereum’s History]

For the first time in quite a long time, since November 2018, Ether (ETH), the native token of Ethereumreached its oversold zone last June 12 this year, as data shown on its relative strength index (RSI) on its weekly chart. 

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The last time Ether entered the oversold level, its price value rebounded and climbed up by almost 400%. Will it happen again this time? 

In this article, let’s have an overview and some experts’ analysis of Ether’s price performance

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Earlier this year, Ethereum had a bumpy start. However, its price level was still on top of its value last year. When investing in Ethereum or any other digital assets, this kind of price fluctuation is part of their nature.

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Invest with Caution

Following Bitcoin, Ethereum is one of the top 2 largest digital currencies, making up approximately a quarter of thousands of crypto coins available in the crypto market. 

However, its vulnerability to price fluctuations is why many crypto analysts and experts always remind crypto enthusiasts with caution when deciding to trade and invest. 

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To increase your level of security in trading and holding crypto assets, it is advisable to use a crypto platform that is reputable and highly safe. Listed below are some of the most reliable choices right now:

  1. Coinbase
  2. Kucoin
  3. Bitcoin Motion
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Ether (ETH) is potentially looking for an oversold price bounce. 

Source: Pixel

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Some crypto analysts conventionally label an asset to be exceedingly sold when its value on the RSI level drops below 30. Moreover, the drop in its price value is a potential opportunity to buy at the dip level. Usually, it is expected for an asset’s price to have a trend reversal after an oversold signal. 

In 2018, when it was almost at the end of the week in November, was the last oversold hit by Ether (ETH), which preceded around a 400% price rally based on the data from TradingView. 

The recent RSI level of below 30 shows the high possibility of ETH encountering a similar upside retracement in its future price value, although an asset’s price history does not exactly indicate a future price trend.  

For example, if Ether performs an oversold bounce, the ETH/USD pair’s immediate challenge is to regain its 200-EMA (Exponential Moving Average) on the weekly time frame close to its support zone at $1,620. 

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If this happens, a bullish trend is expected to reach the 50-EMA in the weekly time frame, which is above the $2,700 price level. This level is almost 100% from its value on June 12. 

However, if there’s no oversold bounce, ETH might hit its downtrend again at the $1,120 price level as its eyed next target. 

What are some important things you need to know when investing in Ethereum?

For instance, if the price of Ethereum plunges 10% overnight, it won’t greatly affect your whole investments and savings when you only allocate 1%-5% of your capital. That is why investors are always being reminded by financial advice to only use a less portion of their portfolio in digital currencies. 

If you invest more than 5% of your portfolio, it opens you to a bigger risk. Experts emphasize that gains outweigh the risks by setting up a 5% limit on your portfolio. 

However, if ETH’s price value positively swings back like what happened in the past, you can have huge investment returns. 

Ethereum’s future price value is uncertain. The same goes with any other digital currency, and that’s why it’s crucial to have financial plans or preparation

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Conclusion

No one can exactly predict what the future holds for Ethereum. However, you can prepare yourself by setting up your financial plans. It’s very crucial to only invest at your preferred level of risk. Give your priorities on your savings account, paying off your high-interest debt, and retirement fund. It would be ideal. 

While the future is uncertain with Ethereum and any type of crypto, you can start to prepare your finances today so that you’re ready to invest at your desired risk level. Prioritize your retirement fund, savings accounts, and high-interest debt payoff first — knowing that even industry insiders view crypto investing with a long-term perspective.

When aiming for a long-term investment, you also have to set your mind on the long-term perspective. Price volatility is quite normal in every digital currency, and you shouldn’t mind the ups and downs. Fix your mind to the broader picture. 

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