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The price of Ethereum appeared to be back on its way to recovery, reclaiming the psychological $2,000 level earlier in the week. However, the altcoin was among the crypto assets heavily impacted by the latest inflation data in the United States, returning below $2,000.

This latest correction highlights the struggles of the Ethereum price over the past few months, underperforming even in the midst of a market-wide bull run. Interestingly, a prominent indicator has flashed the imminence of a bottom for the second-largest cryptocurrency.

Is ETH Ready For A Rebound?

In a March 28 post on the X platform, Chartered Market Technician (CMT) Tony Severino shared that a critical indicator for the Ethereum price is at 2018 bear market levels. The crypto expert suggested that the altcoin could be gearing up for a rebound from its recent lows.

This analysis is based on recent changes in the 1-month relative strength index (RSI) indicator on the Ethereum monthly chart. The relative strength index is a momentum indicator used in technical analysis to measure the speed and magnitude of an asset’s price changes.

The RSI oscillator is used to detect whether an asset is being overbought or oversold, indicating the tendency of a trend/price reversal. Typically, an RSI reading of over 70 signals an overbought market condition, while a relative strength index value below 30 suggests an oversold condition.

According to Severino, the monthly Ethereum RSI indicator is currently at a value last seen during the bear market in 2018. As observed in the chart below, the indicator also reached this bottom following the crypto market capitulation events in May and November 2022.

Source: @tonythebullBTC on X

After reaching this level, the relative strength index and price of ETH tend to bounce back to new highs. In the 2018 cycle, the Ethereum price surged by nearly 4,000% from around $120 to the current all-time high of $4,878. 

Meanwhile, the altcoin returned to around this record-high price in early 2024 after reaching this RSI bottom in 2022. If history were to repeat itself, the price of ETH could bounce back from its current point to a new high.

However, Severino highlighted in his post that the monthly Ethereum RSI bottom in 2018 came after the price dropped roughly 94% from its then all-time high. The price of ETH is only 56% adrift from the local high and 63% from its current record high. Hence, it remains to be seen whether the Ethereum price is at risk of further decline.

Ethereum Price At A Glance

As of this writing, the price of ETH is around $1,880, reflecting an almost 7% decline in the past 24 hours.

The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView

Featured image from Unsplash, chart from TradingView

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Ethereum’s attempt to regain bullish momentum has hit a roadblock, as the price failed to break through the crucial $2,160 resistance level. After showing signs of recovery, ETH faced strong selling pressure at this key level, preventing a sustained breakout and disappointing bullish traders who were hoping for further upside.

Its inability to push past this resistance suggests that bears are still in control, keeping Ethereum’s price under pressure. With the momentum fading and the market sentiment turning cautious, traders are now closely watching key support zones to determine the next move.

Bearish Pressure Mounts: What’s Next For Ethereum?

Ethereum is facing increasing downside pressure as its latest recovery attempt was rejected at the $2,160 resistance level. The failed breakout has reinforced bearish sentiment, with key technical indicators signaling weakness. If buyers fail to step in, ETH could be at risk of deeper declines in the near term.

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One of the major warning signs is weak volume during the recovery attempt. A strong breakout typically requires significant buying interest, but Ethereum’s rally lacked momentum, making it easier for sellers to regain control. This lack of conviction from bulls suggests that the upside move was not sustainable, allowing bears to push prices lower.

Additionally, the Relative Strength Index (RSI) has broken down, moving below key thresholds that indicate weakening bullish strength. The current declining RSI shows that buying pressure is fading, making it difficult for Ethereum to build upward momentum. If the RSI continues trending downward, it could further confirm a prolonged bearish phase.

The  Moving Average Convergence Divergence (MACD) has also turned negative, with a breakdown below the signal line and a widening gap between the MACD and its moving average. This crossover indicates that bearish momentum is accelerating, reducing the chances of an immediate recovery. When combined with other bearish signals, the MACD breakdown further supports the case for a continued downside.

Looking ahead, ETH may retest key support zones. However, a strong bounce from lower levels could offer bulls another chance to regain lost ground. For now, the charts suggest that Ethereum remains vulnerable to further declines.

Support Levels To Watch: Can Bulls Prevent Further Decline?

With attention now turning to key support levels, the first major support to watch is around $1,523, a level that previously acted as a short-term demand zone. If Ethereum holds above this area, it might provide bulls with a foundation for another rebound attempt. However, a break below this level could signal growing bearish dominance, increasing the risk of deeper losses.

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Below $1,523, the next key support lies at $902, aligning with previous price reactions and acting as a psychological level for traders. A failure to hold here may accelerate selling pressure, pushing ETH toward other support below.

Featured image from iStock, chart from Tradingview.com

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