Ethereum News Today: Bullish Momentum Falters as RSI Divergence Casts Shadow Over ETH's New High

Ethereum (ETH) reached a new all-time high of $4,884 in early August 2025, surpassing its previous peak. However, the technical indicators suggest that the market may be facing short-term headwinds. The relative strength index (RSI) has shown bearish divergence on both daily and 4-hour timeframes, indicating that while prices have climbed to new highs, the underlying momentum has not kept pace. This divergence is a common warning sign in technical analysis, often pointing to potential exhaustion in an uptrend [1].

On the daily chart, Ethereum’s price has formed a slightly higher high compared to its previous peak, but the RSI has failed to confirm this with a corresponding higher high. This divergence has historically been associated with trend corrections or reversals, as it suggests that buyers are struggling to maintain momentum [1]. The price is currently consolidating just below the all-time high, within the upper boundary of an ascending channel. Key support levels have been identified at $4,400–$4,450 and a Fib retracement cluster at $4,070–$3,900. A break below the $4,400 level could trigger further selling pressure, pushing the price toward $4,000 [1].

The 4-hour chart reveals similar patterns. After a sharp liquidity sweep toward $4,884, the price has entered a consolidation phase. The RSI remains in bearish divergence, reinforcing concerns that the upward move may be losing steam. Critical short-term support levels include $4,477 (0.5 Fib) and $4,380–$4,311 (0.618–0.702 retracements). A breakdown below these levels could accelerate the downward trend, potentially testing the $4,000 psychological level [1].

On-chain data also highlights signs of market stress. Ethereum’s futures volume bubble map shows a surge in speculative activity, with multiple red bubbles indicating overheating in the derivatives market. Historically, similar patterns have been followed by significant corrections, as rising leverage increases the risk of liquidation cascades. This aligns with the bearish RSI divergence observed on spot charts and suggests that the market may be at a higher risk of volatility and corrections in the near term [1].

Ethereum’s rally to new highs has not been mirrored by the broader cryptocurrency market. While ETH has pushed above previous resistance levels, the overall market cap has corrected by approximately 8% in the days following the all-time high. This divergence raises questions about the sustainability of the bullish momentum in the broader market. If the current consolidation phase fails to attract new buyers, the risk of a more widespread correction could rise, particularly if key support levels in the $4,000–$4,095 range are breached [3].

Analysts have noted that the current market structure remains more bullish than bearish as long as prices hold above the $4,000–$4,095 pivot zone. However, the formation of a potential double top and the bearish divergence on RSI suggest that market participants may be cautious about taking profits. The path forward will depend on whether buyers can defend key support levels and generate enough momentum to push prices above the $4,800 all-time high again. If this fails to materialize, a deeper correction into the $3,500 support zone cannot be ruled out [3].

Source:

[1] Ethereum Price Analysis: Is ETH About to Break Past $5K After Recent ATH? (https://cryptopotato.com/ethereum-price-analysis-is-eth-about-to-break-past-5k-after-recent-ath/)

[2] Ethereum Reaches New ATH, But RSI Divergence Clouds ... (https://www.newsbtc.com/news/ethereum/ethereum-reaches-new-ath/)

[3] Ethereum and Cryptocurrency Markets Send Worrying Signs Despite Last Friday's Spike (https://www.marketpulse.com/markets/ethereum-and-cryptocurrency-markets-send-worrying-signs-despite-last-fridays-spike/)