Key takeaways:
Ethereum’s market dominance has hit overbought RSI levels not seen since May 2021, historically followed by major pullbacks.
ETH/USD is showing a bearish divergence on the four-hour chart, hinting at a potential 10–15% price correction.
Despite the near-term risks, some analysts view a pullback as a “buy-the-dip” setup before a possible move toward $3,500–$3,800.
Ether (ETH) has surged over 50% month-to-date in May, vastly outperforming the broader crypto market’s 15.25% gain. The rally has pushed Ethereum’s market dominance (ETH.D) toward the critical 10% threshold for the first time since March.
But the rising dominance accompanies signs of overheating, indicating that Ethereum bulls should not celebrate the rally just yet.
Ether’s RSI most overextended since May 2021
The strong recovery in Ethereum’s crypto market share has pushed its daily relative strength index (RSI) to its most overbought zone since May 2021, raising red flags for traders