According to the 100eyes Crypto Scanner account, there is a bearish divergence on the hourly Ethereum chart.
A bearish divergence occurs when a certain cryptocurrency records higher highs on the price chart while simultaneously recording lower lows on the relative Strength Index (RSI) momentum oscillator.
The RSI, which oscillates between 0 and 100, shows whether or not a certain asset is overbought or oversold.
If the price moves in the opposite directions of the oscillator, traders can spot divergence, which comes in two forms (bullish and bearish). In this particular case, traders can spot bearish divergence since the RSI is down despite the fact that Ethereum has recorded substantial gains over the weekend.
Bearish divergence indicates that there is buyer exhaustion, which means that it would be challenging to maintain the ongoing bullish momentum.
As reported by U.Today, the price of Ethereum recorded a substantial price spike on Sunday, surging by more than 6%. The cryptocurrency managed to substantially outperform Bitcoin over the past 24 hours.
However, Ethereum is once again down roughly 4% as the market is digesting terrible Bitcoin ETF outflows and fresh macroeconomic uncertainty. Concerns about “stagflation” are front and center following recent economic data. JPMorgan boss Jamie Dimon recently warned that this could be the case, with inflation remaining high and economic growth remaining low. The famous banker said that the current state of the economy reminds him of the 1970s. The odds of several rate cuts have plunged, and this is not a favorable outcome for risk assets.
So far, it looks like Ethereum is going to score its first monthly close in the red this year after seven consecutive green candles.
