Ethereum Mired in Oversold Slump, Can It Defend $1,888 Support and Rebound?

▲ Ethereum (ETH) ©

As macroeconomic uncertainty combines with the breakdown of key technical support levels, Ethereum (ETH) is precariously hovering around the $1,900 mark, pushing investor anxiety to extreme levels.

According to CoinMarketCap on February 28 (local time), Ethereum fell 4.81% over the past 24 hours to $1,928.95, marking a steeper decline than the broader cryptocurrency market. The primary cause of this downturn is analyzed as a collapse in its technical structure, as the price fell below both the 7-day and 30-day moving averages, confirming sustained selling pressure.

In particular, the Relative Strength Index (RSI), which measures buying and selling strength, plunged to 27.94, firmly entering oversold territory. The current price is testing support near $1,888, the lower end of its recent trading range. Notably, trading volume decreased by 9.39%, suggesting the drop was not driven by panic selling but rather by a severe lack of buying support. Each attempted rebound has been met with intensified selling, increasing downward pressure.

Ethereum’s weakness appears to reflect broader macro-driven risk aversion rather than asset-specific negative factors. With the total cryptocurrency market capitalization down 2.37% and Bitcoin (BTC) falling 2.38%, Ethereum has absorbed losses from traditional financial markets, showing a high 75% correlation with the S&P 500 index. CoinMarketCap’s Fear and Greed Index currently stands at 16, indicating extreme fear, suggesting that if weakness in the stock market persists, Ethereum may struggle to escape continued pressure.

The short-term market direction will depend on whether Ethereum can hold above the recent swing low support at $1,888. If this level holds, a relief rally toward the 38.2% Fibonacci retracement level at $1,996 could materialize. Furthermore, reclaiming the 50% Fibonacci level at $1,975 would provide clearer confirmation that short-term bearish pressure has eased.

However, if the $1,888 support level breaks, the situation could worsen significantly. Combined with negative funding rates and a declining trend in open interest in the derivatives market, there is a risk of a further drop toward the $1,800 level. Ultimately, for Ethereum to rebound from oversold conditions and establish a foundation for recovery, the most critical prerequisite is for Bitcoin to firmly consolidate above the $65,000 level.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses resulting from it. The content should be interpreted for informational purposes only.