Key Takeaways:
- Ethereum price may dip toward $3,500 – $3,000 after reaching overbought RSI levels.
- An ETH whale secured $9.87M in profit, among other similar moves from similar wallets.
- Despite short-term risks, long-term holders are still bullish on Ethereum.
Ethereum has been on an impressive eight-day rally, after climbing as high as $3,865. However, its 14-day Relative Strength Index has now reached overbought territory. This has triggered worries about a possible short-term correction.
The RSI currently sits near 78, a level that historically points towards an incoming cooldown phase for ETH. Selling activity is now increasing, and some investors are locking in profits. Could Ethereum be eyeing a retreat to the $3,000–$3,500 zone in the coming weeks?
Ethereum Overbought Signals Indicate Short-Term Dip
The first signs of a slowdown appeared on Tuesday. After touching its recent high, Ethereum pulled back by more than 3% to around $3,664. This move ended its eight-day winning streak and has some analysts pointing to a familiar pattern.
Historically, high RSI levels tend to be followed by a price correction. A similar situation occurred in late May when ETH dropped nearly 19% after a similar RSI surge.
According to technical indicators, the 20-day EMA, currently near $3,500, could be the first major support. However, the price may weaken further.
It may test the $3,000 level and align with the historical behavior of the market in times like these. Ethereum is still safely above its multi-year ascending trendline despite the short-term risks.
Ethereum Whales Make Their Moves
Investor activity also shows this change in short-term sentiment. For example, a well-known Ethereum whale with wallet address “0x8C08” recently sold 8,005 ETH for $30.03 million.
LookOnChain reported this. This sale averaged around $3,751 per token and helped this whale secure an impressive $9.87 million profit. The investor bought 9,582 ETH for a total of $26.11 million. That works out to an average purchase price of $2,725 per ETH.
Despite the big sale, the wallet still holds 1,577 ETH (roughly $5.96 million). This shows that the whale partially exited their position, rather than liquidating it all.
On the other end of the fence, LookOnChain also recently pointed out bullish moves from not one, but three whales. These whales reportedly pulled 10,703 $ETH( worth $39.6M) from Kraken on 23 July.
Overall, this strategic profit-taking from the whales, especially during periods of a market slowdown, could be bullish. It shows that large holders manage their positions smartly, rather than exiting entirely out of fear.
Ethereum’s Bullish Structure Remains Intact
Even though Ethereum might dip in the short term, the general trend is still upward. On the 4-hour chart, ETH has consistently created higher highs and lows since June.
The price is well above its 50-day EMA ( around $3,468) and 100-day EMA (around $3,204). Both of them serve as support zones.
The Bollinger Bands are also a great way to determine what is happening in the market. Ethereum broke through the upper band multiple times during the recent rally, a sign of strong momentum.
When writing, the price has returned within the bands and shows a cooling-off phase amid possible reversion to the mean. For context, the mean currently sits near $3,518, which could be great for stabilization before the next move.
These technical signals reinforce the idea that Ethereum is not entering a bearish trend at all. Instead, it is merely pausing for breath. This could provide a good opportunity for accumulation before the cryptocurrency targets higher resistance levels.
