Ethereum News Today: Ethereum's Oversold RSI Signals Potential 134% Rally as Support Holds

Ethereum (ETH) has retreated to near-range lows, with price action suggesting a potential reversal amid converging trends with Bitcoin (BTC). The cryptocurrency is currently consolidating above critical support at $4,120, having tested oversold conditions on the Relative Strength Index (RSI) and facing a confluence of technical and on-chain signals that could herald a rebound. Analysts highlight that Ethereum's RSI has reached its most oversold level since April 2025, a pattern historically followed by sharp rallies. For instance, a similar oversold condition in April 2025 preceded a 134% surge within two months Bitcoin, Ethereum and XRP Price Prediction For October 2025^[1].

The $4,120 support level has become a focal point for traders, with Ethereum's price stabilizing above this threshold after a recent dip into the $4,000 range. On-chain data indicates growing institutional interest, including $547 million in inflows to spot Ether ETFs and corporate purchases like BitMine Immersion's $10.6 billion ETH acquisition . These developments contrast with recent selling pressure, including BlackRock's $205 million ETH sale and $35.8 million in exchange outflows, which have compressed ETH's price between $4,120 and $4,262 .

Technical indicators suggest a potential short squeeze could ignite a rally. Over $10 billion in short positions cluster above $4,359, meaning a decisive break above this level could trigger forced buybacks and propel ETH toward $4,600 . Additionally, Ethereum's 20-day EMA (at $4,263) and the 100-day EMA (at $3,874) form a key resistance-convergence zone that could determine near-term direction. If bulls reclaim $4,359, historical fourth-quarter performance-averaging +24% gains-further supports a potential rebound toward $7,000–$8,000 Bitcoin, Ethereum and XRP Price Prediction For October 2025^[1].

The confluence with Bitcoin's October performance also plays a role. Bitcoin's historical October strength (73% positive closes over 15 years) has often coincided with Ethereum's seasonal rallies. While BTC faces risks from macroeconomic uncertainties, its strong Q4 track record could reinforce ETH's recovery if the two assets continue to align Bitcoin, Ethereum and XRP Price Prediction For October 2025^[1].

However, downside risks persist. A breakdown below $4,120 could expose Ethereum to deeper support at $3,874, with further declines possible toward $3,427. Analysts caution that without consistent institutional inflows, Ethereum may remain range-bound until key resistance at $4,359 is resolved .