The Crucial Daily RSI Divergence That Could Save ETH From New Lows

Ethereum remains under pressure across higher timeframes, but the latest price action is showing early signs that bearish momentum may be losing strength. While the broader trend remains decisively bearish, the recent movements suggest that sellers may be approaching exhaustion after weeks of sustained downside.

Ethereum Price Analysis: The Daily Chart

ETH’s recent rejection from the $1.72K-$1.78K supply zone triggered another leg lower, pushing it back into the critical $1.46K-$1.53K demand region. This zone has acted as support multiple times throughout June and continues to attract buyers whenever the price approaches it.

The most notable development on the daily timeframe is the emerging bullish divergence on the RSI. While the asset has continued making lower lows during June, the RSI has been forming higher lows near oversold territory. This divergence suggests that downside momentum is weakening despite ETH remaining near cycle lows.

Although a bullish divergence alone does not guarantee a reversal, it often appears during the latter stages of bearish trends and can serve as an early warning that sellers are losing control. As long as ETH holds above the $1.46K-$1.53K support area, the divergence remains valid, increasing the probability of a relief rally.

However, confirmation would require a break above the nearest resistance zones, particularly the $1.72K-$1.78K supply area. Until then, the broader trend remains bearish despite the improving momentum profile.

ETH/USDT 4-Hour Chart

On the 4-hour timeframe, Ethereum has spent the past several sessions consolidating above the lower demand zone after the sharp sell-off from resistance.

A descending trendline has capped every recovery attempt since the June 22 rejection. However, the asset is now compressing directly beneath that trendline, while volatility continues to contract. This setup creates the possibility of a short-term breakout if buyers can push through trendline resistance.

A successful breakout would likely target the $1.72K-$1.78K supply zone, which served as the origin of the latest decline. Such a move would align well with the bullish RSI divergence visible on the daily chart and could provide the first meaningful recovery rally in several weeks.

On the downside, the $1.52K area remains the key level to monitor. Losing this support would invalidate the short-term bullish scenario and shift focus back toward deeper downside continuation within the broader downtrend.

For now, Ethereum appears trapped between support and descending resistance, with the next directional move likely determined by whichever side breaks first.

Sentiment Analysis

The liquidation heatmap reveals an interesting shift in liquidity positioning.

While liquidity remains concentrated above the current price, particularly between roughly $1.68K and $1.80K, Ethereum is currently trading beneath these large clusters. Markets often gravitate toward areas with substantial leveraged positioning, making those overhead liquidity pools attractive short-term targets.

This creates a scenario where ETH could stage an upside liquidity sweep before any larger directional move develops. A breakout above the 4-hour descending trendline would increase the probability of price moving into these overhead liquidity pockets, triggering short liquidations and fueling a squeeze toward the $1.7K-$1.8K region.

At the same time, the heatmap also shows notable liquidity beneath the market around the lower support region, meaning both sides of the range remain vulnerable to liquidation-driven volatility.

Combined with the bullish daily RSI divergence and the compression beneath 4-hour trendline resistance, the current setup suggests Ethereum may first attempt an upside liquidity grab before the market determines whether a more sustainable recovery can develop. The reaction around the $1.72K-$1.80K liquidity cluster will likely provide important clues regarding Ethereum’s next major trend.