Closely followed crypto analyst Benjamin Cowen says that Ethereum (ETH) is destined to revisit a support level after an overheated rally.
In a new strategy session on YouTube, Cowen tells his 926,000 subscribers that there appears to be a bearish divergence playing out between ETH and its relative strength index.
[adinserter block="1"]A bearish divergence is when price trends higher while an indicator, in this case the RSI, trends lower, foreshadowing the exhaustion and potential reversal of the price movement.
According to Cowen, ETH’s RSI is signalling a correction coming for Ethereum, likely in September.
“There is still a chance that the divergence continues, but it’s not something you should really be hoping for at this point. If you look at the RSI of Ethereum, you can pretty clearly see it’s been putting in lower highs here for a little while while it’s been putting in higher highs in price, so it just seems like it’s a matter of time before it comes home to roost, and I think that’s going to happen in September.”
Cowen also says that Ethereum in its Bitcoin pair (ETH/BTC) is primed for another move down. However, he thinks ETH/BTC will likely bounce and then make its way back up to the 0.053 level, about a 34% move from current levels.
“I think that you’re going to see a macro higher low form on the ETH/BTC valuation probably by like late October, so it could look something liek this, maybe it even goes up a little bit more, but I thin you’re probaby going to see it come back down here…and then try to go up again, potentially as high as 0.053.”
At time of writing, ETh is trading at $4,341.
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