ETHDAI -191.07% in One Month Amid Sharp Volatility

On SEP 6 2025, the ETHDAI synthetic asset dropped by 4.64% within 24 hours to $4306.4, marking a 20.84% decline over the past week. The one-month performance has seen a dramatic downturn of 191.07%, though over the past year, the metric has surged by 2903.87%. The latest decline reflects heightened volatility within the market, driven by mixed on-chain activity and shifting investor sentiment.

A technical breakdown of ETHDAI's price action reveals a rapid move below key resistance levels. Traders have noted that the 50-period and 200-period moving averages are now converging in a bearish crossover pattern, reinforcing the downward trend. The Relative Strength Index (RSI) has fallen into oversold territory, suggesting potential for a short-term rebound. However, the broader bearish bias remains intact, with volume patterns indicating aggressive selling pressure.

The Ethereum-based synthetic pair has experienced sharp corrections across multiple timeframes, with market participants closely watching for signs of stabilization. Liquidity in ETHDAI has shown signs of thinning in recent sessions, raising concerns over execution risks for larger trades. A breakdown below the $4300 support level could expose additional downside, with the next level of significance resting near $4200. Analysts project that a sustained move below $4200 may attract further short-term sellers.

Backtest Hypothesis

A proposed backtesting strategy for ETHDAI involves a crossover system using the 50-period and 200-period moving averages. The hypothesis tests whether a long entry is triggered when the 50-period line crosses above the 200-period line and a sell signal is generated when the opposite occurs. This system is designed to capture medium-term trends, and when applied to historical ETHDAI data, the strategy would have entered positions during periods of bullish momentum and exited during bearish reversals. The RSI is used as a secondary filter to confirm overbought and oversold levels, adding a layer of risk management to the core strategy.