The Relative Strength Index (RSI) readings on Ethereum are in the deeply oversold territory not seen since Dec. 2016. So, should the traders initiate long positions?
No. In a downtrend, the RSI can remain in the oversold territory for a long time. However, traders should watch for a reversal in the price action because an oversold reading shows that the selling has been overdone.
On March 27, the ETH/USD pair broke below the March 18 lows of $452.32. Ideally, the selling should intensify and the cryptocurrency should fall to the next support of $385.
If the markets reject the lower levels and the price starts to move back up, it will be the first indication that a bottom is in place. Once the price rallies above $600, it will indicate a double bottom formation. Therefore, we suggest waiting until Ethereum shows strength.