Ethereum, Most Oversold Since The March 2020 ‘COVID Crypto Crash’
Oversold levels of Ethereum have reached a high that traders hadn’t witnessed for almost two years, according to the Relative Strength Index (RSI).
The RSI, an indicator that measures the momentum of assets to analyze overbought or oversold conditions, illustrated the magnitude of Ethereum’s recent price dump. Right now ETH is oversold, some traders would say now is a good time to buy in not sell.
With the cryptocurrency market suffering from losses up to 20% this week, Ethereum has been one altcoin hit harder than others, as well as Bitcoin experiencing a 10% hit in the past week, having dropped from a value of $48,123 to $42,317, at the time of writing.
Both cryptocurrencies set record highs in recent months and had started off 2022 with a reality of their volatility. I have been trading crypto for long enough that I don't panic when situations like this arise. I personally have faith in the Ethereum community.
Why The Price Drop?
Several reasons came to mind regarding Ethereum’s recent price drop, most notable is, the findings of the Federal Reserve December meeting which demonstrated its aim to push through a faster timetable for hiking interest rates in 2022.
Trading in the interest-rate futures market showed a strong possibility for the first increase to occur in March and, minutes after the findings were released, Ethereum subsequently dipped.
With fears of higher inflation, Sean Farrell and Will McEvoy, strategists at Fundstrat Global, stated investments across smart contract platforms could be the way to go. “Given the current macro backdrop, leverage within the Bitcoin market, and recent robustness seen in the altcoin market, we think it’s appropriate to be overweight Ethereum and other smart contract platforms,” they said.
I myself have a diverse portfolio. I believe that it is best not to have all your eggs in one basket. For those that are interested, some of the projects I am currently invested in are the Goji Crypto project ($HANU $MIA $GOJ and $GABA), the Shiba Inu project ($SHIB $BONE and my favorite $LEASH), and the CollarQuest project ($COLLAR $TAG and $GEM).