The 14th week ‘Relative Strength Index’ The (RSI) indicator of Ethereum (ETH) is currently above the 70 level. Why is this so special, you may ask? When this happened before, the ETH price was on the verge of a gigantic rise. Will that happen again this time?
Key indicator marks price rise
First a short explanation. What exactly is the RSI indicator? This is a so-called momentum indicator that expresses the speed and price change of a price in one number. A value above 70 is considered high, a value below 30 is considered low and 50 is considered neutral. Above 70 also means that the asset in question is “overbought”. Then there is extremely high demand for the asset.
For the first time since May 2021, ETH’s 14-week RSI value is above 70. What is particularly interesting, however, is to see when the ETH price last rose above this level after being below this value for a long time.
That was at the beginning of November 2020. After a long accumulation phase, the crypto market got going again and ETH was around $450 at the time. However, once the RSI value rose above 70, it marked the beginning of a parabolic increase. In the following 7 months, ETH price rose to $4,600. An increase of more than 900 percent.
Exactly the same thing happened with ETH price in January 2016, February 2017 and December 2017 after the RSI value exceeded 70. Of course, it is not a guarantee of a new parabolic advance, but it certainly gives hope.
Ethereum is catching up
An ETH price rally would be no surprise. Ethereum has performed well in recent months, but certainly not as well as Bitcoin (BTC) and several altcoins. Will ETH catch up?
Basically it wouldn’t be a surprise. Ethereum developers are working hard. The long-awaited Dencun upgrade will take place on March 13th.
One of the changes that Dencun brings is “Proto-Dank Hardening”. This new technology is intended to dramatically reduce transaction costs for Ethereum Layer 2 networks. Read all about this new Ethereum update in this article.