Ethereum Trading Signal Hits 2018 Lows – Deciphering the Implications

• Ethereum hit its lowest point in over seven months, causing concern in the cryptocurrency community.
• The confirmation of a long-term bullish divergence in the daily Relative Strength Index (RSI) has rekindled optimism among investors.
• Standard Chartered foresees Ethereum’s price hitting $8,000 by the end of 2026, reflecting its potential in the eyes of experts and institutional investors.

On August 12, Ethereum hit its lowest point in over seven months, causing concern in the cryptocurrency community. But recent developments have rekindled optimism among investors.

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One major reason for this newfound optimism is the confirmation of a long-term bullish divergence in the daily Relative Strength Index (RSI). The RSI is a critical tool for gauging market momentum.

It helps traders figure out if an asset is overbought (price too high) or oversold (price too low), guiding their buying and selling decisions. 

In Ethereum’s case, the RSI had been steadily declining until August, when it made a turnaround. This bullish divergence provided a glimmer of hope for traders, indicating the potential for a positive price movement.

To get the full picture, let’s look at Ethereum’s recent price history. Starting in April, the price of ETH had been following a descending parallel channel. This channel saw a significant drop below the crucial support level of $1,650, hitting a low of $1,521 on October 12.

This was the lowest Ethereum had been in 214 days, leaving many uncertain about its future.

The bearish trend faced resistance when the RSI turned bullish in August. When the RSI rises above 50 and the trend is upward, it signals that the bulls are in control. Conversely, if the RSI falls below 50, it suggests the bears are dominating.

The bullish RSI divergence indicated that as the price was decreasing, the momentum was on the rise, giving hope for Ethereum’s recovery.

While Ethereum’s price rebound is undoubtedly good news, the broader outlook for the Ethereum network remains mixed.

On one hand, Ethereum experienced a three-year low in gas fees, which are transaction costs paid by users. This raised concerns about the network’s overall trajectory, especially in the face of competition from other blockchain platforms.

Standard Chartered, an international bank, foresees Ethereum’s price hitting $8,000 by the end of 2026, with a long-term valuation ranging from $26,000 to $35,000. These predictions reflect Ethereum’s potential in the eyes of experts and institutional investors.

Ethereum Analysis With RSI and Historical Patterns

The Relative Strength Index (RSI) has hit a low not seen since December 2018 when it dropped to an extreme value of 18. Such super low RSI values often signal a price bottom, hinting at a significant upward trend. Even during the price crash in March 2020, the RSI didn’t reach 20.

Interestingly, December 2018 is the only other time Ethereum’s price history showed a bullish divergence in its oversold territory. After this divergence, the price shot up by an impressive 345%. This historical data paints an encouraging picture of Ethereum’s potential for price growth.

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Considering the RSI readings and the descending parallel channel pattern, the most likely Ethereum price prediction is bullish. The descending parallel channel is usually viewed as a corrective pattern, suggesting an eventual breakout.

The bullish RSI divergence could be the trigger for this breakout, potentially leading to a 33% price increase, reaching the $21,000 horizontal resistance area.

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