Ethereum has been on a steady downtrend since mid-December. Over the past three months, it has experienced record levels of active selling, losing over 50% as its price dropped from $3,993 to the current level of under $1,900.

But there could be an opportunity for buyers.

Ethereum Hits Oversold Zone

Qiao Wang, a prominent figure in the crypto industry and founder of Alliance DAO, recently pointed out that Ethereum (ETH) is currently at a historically oversold level similar to previous major downturns.

He compared the current ETH market sentiment to key past events: the 2021 Terra collapse, the 2018 deep bear market when ETH was infamously labeled a “two-digit shitcoin,” and the aftermath of the 2016 DAO hack.

Each of these moments marked extreme pessimism yet proved to be prime buying opportunities for long-term investors. As such, Wang’s observation suggests that the current ETH price might be approaching a point of undervaluation.

“However poor the outlook is for given asset, there is a price at which it makes sense to own it. but to answer ur question, if anything, eth is still the most likely place for institutional adoption to happen.”

Along the same lines, crypto analyst “Merlijn The Trader” noted that Ethereum’s 3-year Stochastic RSI has hit oversold levels. This indicator, which measures momentum and identifies potential trend reversals, has historically signaled major buying opportunities when deeply oversold.

According to Merlijn, every previous occurrence of this signal was followed by a significant rally in the crypto asset, which suggests that a potential bullish reversal could be on the horizon.

Moreover, Ethereum has also witnessed significant whale accumulation in recent weeks. This trend may suggest that many holders see current levels as a strategic buying opportunity.

ETH Bulls Watch for Turnaround

Despite the bearish sentiment currently impacting the broader crypto market, Ethereum may find a catalyst for recovery through positive developments. For instance, the US Securities and Exchange Commission (SEC) has acknowledged Fidelity’s proposal to introduce staking within its spot Ethereum ETF (FETH), with Grayscale and 21Shares also filing for similar approvals. If granted, these changes could boost investor confidence and drive demand.

Additionally, Ethereum’s upcoming Pectra upgrade, which aims to improve user experience with improved features, is progressing steadily, having already been finalized on the Holesky and Sepolia testnets. As the mainnet launch nears, it could help reignite ETH’s price momentum.

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