Ethereum entering the Oversold Zone? Should the investors observe it as a buy-the-dip zone?
Crypto investors have not started to accept that Ethereum has entered the oversold zone instead of the buy the dip zone. ETH is set to suggest a potential turnaround in the nearby future in the highly volatile cryptocurrency market. The current Ethereum price has increased by 400% since it entered the oversold zone in the last quarter of 2018. This cryptocurrency is also incurring huge losses at -42% for crypto investors to drive profit in crypto wallets. The 400% rise in the oversold zone is instigating crypto investors to observe it as the buy the dip zone.
The oversold zone of Ethereum is currently on the status of this crypto because it is trading at a price much lower than the true value of the cryptocurrency. The oversold condition includes two types of common technical indicators such as Relative Strength Index (RSI) and Bollinger bands. RSI leverages the momentum oscillator for evaluating the speed and price fluctuation while the Bollinger band has a lower, middle, as well as upper band.
Crypto investors are using the term ‘oversold zone’ because according to their opinion, the ETH price has reached the bottom of the cryptocurrency price and has the potential opportunity to rise in the nearby future. Meanwhile, they are viewing this opportunity to buy the dip of ETH. Buy the dip is taken into consideration when crypto investors decide to buy incrementally as the price declines, wait till the cryptocurrency price settles at a particular point, as well as set buy orders at lower prices as a good strategy.
Thus, the Ethereum price, from the point of view of the highly volatile cryptocurrency market, shows that it has reached the oversold zone. But from the point of view of crypto investors, Ethereum is providing the buy-the-dip time to drive profit in the future in crypto wallets. It is in the oversold zone because the RSI has dropped below 30. It can lead to a trend reversal from the short-term to the mid-term in the volatile cryptocurrency market. There are pressures on Ethereum despite the bullish outlook such as inflationary pressure and many more.
Macro headwinds and a US$650 Ether price target
The RSI-based bullish outlook appears against a flurry of bearish headwinds, ranging from persistently higher inflation to a classic technical indicator with a downward bias.
In detail, Ether’s price declined by more than 20% in the last six days, with most losses coming after June 10, when the United States Labor Department reported that the inflation reached 8.6% in May, the highest since December 1981.
The higher consumer price index (CPI) strengthened fears among investors that it would force the Federal Reserve to hike interest rates more aggressively while slashing its US$9 trillion balance sheet. That dampened appetite for riskier assets, hurting stocks, Bitcoin, and Ethereum.